Samsung Electronics and SK hynix erase most of previous gains, pulling down KOSPI by approx. 120 points
AI spending concerns re-emerge in a single day; oil and geopolitical burdens prompt foreign investors to net-sell electrical and electronic shares
Key Market Trends
① SpaceX effect fades in a day; AI financial concerns resurface
Samsung Electronics and SK hynix suffered sharp declines, driving the KOSPI lower.
Perception spread that SpaceX’s robust earnings had already been largely priced into the domestic market the previous day. Furthermore, SpaceX's regular-session closing price fell below its previous after-hours levels, dampening momentum for additional gains.
Lam Research's plunge in after-hours trading—despite posting earnings and guidance that beat market expectations—also weighed on semiconductor sentiment.
Rather than the earnings themselves, profit-taking emerged as the results failed to satisfy heightened market expectations.
Meta, which reported earnings after the market close, saw its free cash flow turn negative, reigniting concerns over heavy AI capital expenditure burdens.
Tesla also surrendered its intraday gains and turned lower.
The debate over profitability versus AI investment costs—which appeared to have eased the day before following earnings reports from SpaceX and Super Micro Computer—returned to the forefront of the market within a single day.
② Oil prices rebound alongside escalating geopolitical risks
The U.S. State Department ordered some personnel at its embassy in Saudi Arabia to depart due to safety concerns stemming from successive Houthi attacks.
Negotiations on a mediation proposal between the U.S. and Iran showed no tangible progress, while reports surfaced of Ukrainian strikes on Russian energy infrastructure.
As international oil prices climbed during Asian trading hours, investor sentiment came under pressure.
With the Northern Hemisphere entering the winter season—a period of rising crude oil demand—apprehension over oil price stability intensified.
The dual headwinds of AI spending concerns and rising oil prices triggered steep losses across most major Asian stock indices.
③ Samsung and SK hynix shave 120 points off KOSPI; foreigners turn net sellers
Samsung Electronics and SK hynix gave up the vast majority of their previous session's gains.
The downturn was heavily concentrated in heavyweight chipmakers, with the two stocks alone dragging the KOSPI down by approximately 120 points.
Major sectors including automobiles, secondary batteries, and finance also experienced broad weakness, with all top 20 market-cap stocks trading in negative territory as of 3:10 p.m.
Foreign investors rotated back to net sellers, primarily targeting electrical and electronics, while also net-selling machinery, chemicals, and food and beverages.
Conversely, they posted net purchases in transport equipment, metals, and pharmaceuticals.
Institutional investors net-sold electrical and electronics, metals, chemicals, and transport equipment while net-buying finance, distribution, and pharmaceuticals.
On the KOSDAQ, both foreign and institutional investors were net sellers.
Supply, Demand, and Sector Flows
The domestic stock market has recently exhibited heightened index volatility driven by shifts in foreign trading patterns.
Customer deposit accounts have dwindled to the 90 trillion won range—their lowest level since the beginning of the year—while credit balances have also contracted.
The conclusion of share buybacks by companies like SK hynix removed a key pillar that had previously supported supply and demand.
With the National Pension Service and other institutional funds in a position where they can scarcely expand their portfolio weights significantly in the short term, the impact of foreign buying and selling on the index has grown more pronounced.
This dynamic explains why major semiconductor stocks, which surged the previous day alongside foreign inflows, gave up most of those gains as foreigners shifted to net selling.
Market Commentary
The market has recently shown an excessive sensitivity to day-to-day headlines. Just yesterday, AI investment concerns eased on the back of earnings from SpaceX and Super Micro Computer, but today financial worries regarding AI resurfaced, triggered by Meta's cash flow figures and Lam Research's share price reaction.
A vacuum in domestic market liquidity is further exacerbating volatility. With customer deposits and credit balances shrinking and share buybacks coming to an end, foreign trading direction is violently swaying the entire index. Investors should keep in mind the possibility that sharp drops and rapid rebounds may alternate for the time being.
On the other hand, the recent decline in the broader index and SK hynix has widened to levels not seen since the global financial crisis. Throughout this deep correction, earnings consensus forecasts for semiconductor companies have yet to show any decisive downward revisions.
It is important to view this correction as the simultaneous reflection of a post-AI-hype cooling phase, supply-demand imbalances, and listing-related issues. While accounting for short-term volatility, it is also time to continuously monitor stocks that have suffered sharp pullbacks outpacing actual earnings adjustments.
Source: Market Analyst's Stock Story (t.me/shmstory)
YouTube: Market Analyst TV (www.youtube.com/@blueoak1004)
This article has been reorganized from a Telegram post by Market Analyst's Stock Story with the author's consent. All content may contain errors and does not constitute a recommendation to buy or sell, nor can it be used as a basis for trading. Under no circumstances may the contents of this post be used as legal grounds.
