Foreign Investors Extend Seven-Day Sell-Off as Semiconductors Lead the Decline on April 15
An employee looks at traces of a ceremony marking the breakthrough above 8,000 in the dealing room of Shinhan Bank in Jung District, Seoul, on July 15
The KOSPI, which surpassed the intraday 8000 mark for the first time in history on the morning of April 15, quickly plunged and closed at the 7400 mark, down 6% from the previous trading day.
This is the largest drop since the record-breaking plunge on March 4, immediately following the US, Israel, and Iran war. It is analyzed that investors, feeling burdened by the rapid surge that saw the index rise by more than 1,000 points in just 7 trading days since breaking the 7000 mark on April 6, began taking profits as soon as it crossed the 8000 mark, causing the downside to collapse rapidly. The scale of the decline was particularly large centered around large-cap semiconductor stocks that had been leading the KOSPI bull market.
According to figures from the Korea Exchange on May 15, the KOSPI closed at 7493.20, down 6.12% from the previous trading day. The drop was 488.23 points, the largest since the decline on March 4 (-698.37), which showed the biggest drop in history by falling 12.06% from the previous trading day. The KOSPI, which started with a weak flat (-0.37%) on this day, turned upward in early trading and crossed the 8000 mark for the first time in history at 9:13 AM. It was 7 trading days after the KOSPI crossed the 7000 mark. However, the upward trend did not last long. The KOSPI dropped sharply starting at 9:40 AM, expanding its decline to the 5~6% range. As selling pressure surged to the level of massive dumping in the afternoon, the KOSPI 200 futures index fell by more than 5% compared to the previous trading day, and a sell sidecar was activated at 1:28 PM. This is the 8th sell sidecar of the year in the KOSPI Market.
The impact of the massive plunge in the stock prices of the semiconductor sector, including Samsung Electronics and SK Hynix, which had been looking toward ‘300,000 Samsung Electronics’ and ‘2,000,000 SK hynix’ until the previous day, is significant. Samsung Electronics closed at 270,500 won (approximately $181), down 8.61% from the previous trading day, and SK Hynix closed at 1,819,000 won, down 7.66%. The semiconductor sector index (KRX Semiconductor) also plummeted by 8.41% compared to the previous trading day. Due to the sluggishness of such large market capitalization stocks, the KOSPI large-cap index fell by 6.32% from the previous trading day, showing a larger drop compared to small-cap stocks (-2.54%).
Although the net buying trend of retail investors was fierce on this day as well, it could not stop the foreign sell-off bomb that has continued for 7 trading days. Foreigners net sold 5.6 trillion won on this day, dragging down the index. They dumped 2.6 trillion won of SK Hynix and 2.5 trillion won of Samsung Electronics, respectively. The net selling volume by foreigners so far this year reaches a staggering 81 trillion won. On this day, retail investors still net bought 7.2 trillion won, centering on large-cap semiconductor stocks, continuing their trillion-won buying trend for 7 trading days.
Yoon Young-sil
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