Combined impact of CXMT, AI bubble fears, and rising oil prices triggers an intraday plunge of over 7%... Fifth straight day of declines.
Heavy selling in Samsung Electronics and SK hynix rattles the index; late-session institutional and opportunistic buying mitigates losses.
Major Market Trends
① Delayed market reaction to CXMT shock leads to semiconductor dumping
The catalyst for the semiconductor rout was reports of Chinese memory manufacturer CXMT launching advanced chips within the year.
Concerns intensified as some media outlets suggested that CXMT’s technology development pace could outstrip that of Samsung Electronics, despite the chips not yet being in commercial production. The "two years ahead" headline fueled market anxiety.
While the news was already priced into the U.S. markets the previous day, it triggered a delayed, concentrated wave of selling in the domestic market, hitting Samsung Electronics and SK hynix particularly hard.
SK hynix breached its 200-day moving average for the first time since May last year, while Samsung Electronics fell to the 200-day support level it touched during the July sell-off.
② Broadcom remarks stoke AI bubble fears; oil prices climb further
Comments from the Broadcom CEO also weighed heavily on investor sentiment.
He noted that while bottlenecks in memory and power supply could be overcome as early as next year, the core issue for future AI investment would be capital allocation.
The suggestion that AI investors are "acting like they are in a casino" has resurfaced concerns regarding speculative investment.
International oil prices continued to rise despite President Trump's calls for increased supply.
Market instability is exacerbated by the widening scope of geopolitical risks, spanning from Iran to clashes between Saudi Arabia and Houthi rebels, as well as threats to energy infrastructure in Russia and Ukraine.
③ Intraday plunge of over 7% moderated by opportunistic buying
The KOSPI tumbled more than 7% during the session, marking its fifth consecutive day of decline.
Late in the day, the index trimmed some losses as institutional investors and opportunistic buyers entered the market, hunting for bargains.
The perception that a drop of over 1,000 points in just five trading sessions was excessive also helped facilitate buying.
However, given the short-term nature of the capital that entered, there remain clear limits to the index’s ability to achieve a full recovery.
Market Supply and Sector Analysis
Foreign investors were net sellers in the KOSPI, focusing heavily on electrical and electronics sectors, while also liquidating positions in finance, chemicals, machinery, and logistics.
Conversely, they were net buyers in construction, retail, transportation equipment, pharmaceuticals, and securities.
Institutional investors were net buyers across most sectors, excluding chemicals and construction, with a strong concentration in electrical/electronics, finance, and transportation equipment.
On the KOSDAQ, secondary batteries, select semiconductor materials/parts/equipment (SAPE), and entertainment stocks showed relative resilience, while most other sectors, including telecommunications equipment, remained weak.
Editor’s Outlook
Recently, the semiconductor sector has been hit by a barrage of negative news just as the window for corporate share buybacks is closing. With foreign capital flows weakening due to rising interest rates and oil prices, the loss of support from share buybacks has made stock prices significantly more sensitive to negative news.
The CXMT issue also requires nuance. It remains unclear whether the products scheduled for year-end release are prototypes or mass-production-ready, and industry insiders view the possibility of large-scale production in the near term as low. Furthermore, the likelihood of Chinese chips being adopted by U.S. data centers is limited. To date, earnings outlooks for Samsung Electronics and SK hynix have not been downgraded.
Nevertheless, in an environment where liquidity concerns persist, technical support levels may lose their significance. If interest rate and oil price burdens continue alongside foreign selling, short-term volatility is unlikely to subside easily.
The KOSPI entered oversold territory last week, and today’s drop appears excessive relative to the weight of the actual news. Given the late-session influx of opportunistic buying, it is worth monitoring the rebound potential of large-cap stocks that saw significant drops and KOSDAQ leaders that had previously outperformed but recently faced a sharp correction.
Data: Sijwangman’s Stock Story (t.me/shmstory)
YouTube: Sijwangman TV www.youtube.com/@blueoak1004
This article is a reconstruction of a post from Sijwangman's Stock Story Telegram channel, published with the author's consent. All content is subject to potential errors and does not constitute a recommendation to buy or sell; it should not be used as the basis for trading. The contents of this post cannot be used as legal evidence under any circumstances.
