South Korea’s benchmark KOSPI index fell sharply on Monday, October 12, dropping 3.65% to close at 6,384.24 points. The significant downturn extended a four-session losing streak, driven by persistent foreign selling, renewed anxiety over an artificial intelligence investment bubble, and broader uncertainties surrounding upcoming semiconductor earnings.
According to data from the Korea Exchange, the KOSPI shed 241.69 points during the session, marking its steepest daily percentage decline since September 2, when the index dropped 3.99%. Since October 6, the index has experienced a cumulative loss of 619.50 points, or 8.85%, pushing it firmly below both the psychological 6,500 and 6,400 thresholds.
Heavy Outflows and Tech Sector Slump
Foreign investors offloaded a net 2.025 trillion won ($1.4 billion) of KOSPI shares in a single session, while institutional investors sold a net 110.7 billion won. In contrast, retail investors stepped in to absorb some of the supply, purchasing a net 1.4674 trillion won.
Large-cap technology stocks bore the brunt of the selloff, despite recent record quarterly earnings reports from leading chipmakers. Samsung Electronics (005930.KS) fell 4.39% to close at 11,500 won, while SK hynix (000660.KS) dropped 4.52% to 1.605 million won. Foreign investors specifically targeted these two giants, unloading a net 1.0431 trillion won of SK hynix and 533.1 billion won of Samsung Electronics.
Other major market-capitalization equities also finished in negative territory. SK Square dropped 6.10%, Samsung Electro-Mechanics declined 3.75%, Hyundai Motor slipped 1.54%, Samsung Biologics fell 1.48%, and LG Energy Solution lost 1.12%.
"Despite solid earnings fundamentals, foreign selling and weak supply-demand conditions are limiting any rebound in the index," noted Lee Kyoung-min, an analyst at Daishin Securities. "Support for the index has also weakened as net buying by other corporate entities tied to Samsung Electronics’ share buyback has ended."
Broader Market and Currency Impact
The technology-heavy Kosdaq index mirrored the main board’s losses, tumbling 43.08 points, or 4.83%, to finish the trading day at 849.19.
Despite the sharp equity correction, the South Korean won strengthened against the US dollar. The exchange rate fell by 7.7 won, closing onshore trading at 1,335.1 won per dollar.
Market analysts point out that enthusiasm for artificial intelligence-related investments has cooled significantly after a robust first half of the year that initially propelled the KOSPI. With major corporate share repurchase programs nearing completion and diminishing retail participation, market strategists indicate that South Korean equities face continued volatility as global investors weigh the sustainability of the semiconductor supercycle.
