Semiconductors plummet due to concerns over AI regulation during the U.S. midterm elections... KOSPI fell 5.28%
KOSDAQ also collapsed below the 700 mark and plunged 5.11%... Biotechnology, shareholder return, selection of favorable stocks, strong performance
On the 5th, the domestic stock market, KOSPI and KOSDAQ both plummeted. As concerns about strengthening regulations on the construction of artificial intelligence (AI) data centers following the results of the U.S. midterm elections and the possibility of a slowdown in demand for memory semiconductors were highlighted, selling was focused on large-cap semiconductor stocks. As foreigners net sold more than 3.4 trillion won, KOSPI fell below the 5,400 mark, and KOSDAQ also fell below the 700 mark.
According to the Korea Exchange, KOSPI finished trading at 5383.80, down 300.00 points (5.28%) from the previous trading day. KOSDAQ closed at 678.41, down 36.54 points (5.11%). The won-dollar exchange rate ended the week at 1342.1 won, up 0.6 won from the previous trading day.
KOSPI started lower due to concerns about strengthening regulations on AI data center construction following the results of the U.S. midterm elections. As concerns about a slowdown in memory semiconductor demand growth increased, foreign selling expanded, especially in the electrical and electronics industries, leading to a decline of more than 5%.
By industry, medical and precision equipment fell 11.5%, electricity and electronics fell 8.5%, machinery and equipment fell 5.4%, and distribution fell 3.4%. Large-cap stocks fell 5.7%, mid-cap stocks fell 0.8%, and small-cap stocks fell 1.2%.
In terms of supply and demand, foreigners net sold 3.4248 trillion won, while institutions and individuals net bought 841.7 billion won and 2.2769 trillion won, respectively. Foreigners net sold 3.1387 trillion won in electricity and electronics, 135.2 billion won in finance, and 56 billion won in machinery and equipment.
KOSDAQ started lower due to concerns about regulation of the U.S. AI industry and ended down around 5% as selling pressure by foreigners and institutions expanded, focusing on the machinery and equipment and electrical and electronic industries. By industry, machinery and equipment fell 10.7%, non-metals fell 9.5%, and electricity and electronics fell 9.4%. Foreigners and institutions net sold 75.8 billion won and 102.9 billion won, respectively, while individuals net bought 172.2 billion won.
Individual stocks are strong on expectations for expansion of U.S. health insurance support and strong performance
As the Democratic Party took control of the Senate and House of Representatives in the U.S. midterm elections, expectations for expanded health insurance support were highlighted. As there was speculation that the policy of reducing health insurance support could be put on hold, buying pressure also flowed into some domestic pharmaceutical and bio stocks. Celltrion (068270) rose 7.50%, and Hanmi Pharmaceutical (128940) rose 9.80%.
SK Biopharmaceuticals (326030) rose 12.27% due to good performance in the third quarter. Consolidated sales were KRW 258.4 billion, an increase of 34.8% compared to the same period last year, and operating profit was KRW 116.3 billion, an increase of 65.9%.
Selvas Healthcare (208370) rose 17.02% due to expectations for growth in the medical diagnostic equipment and digital healthcare business.
Individual stocks strengthened due to positive shareholder returns and overseas orders
Companies that announced expansion of shareholder returns also showed strength. Kakao (035720) rose 10.65% as it decided to acquire and cancel 150 billion won worth of treasury stocks.
Korea Zinc (010130) rose 11.00% due to plans to burn treasury stocks and re-promote stock splits, and Hyundai Department Store (069960) also rose 6.44% due to improved third-quarter performance and the decision to burn treasury stocks.
Digens (113810) rose 7.55% after deciding to acquire treasury stocks worth 500 million won. MH Materials (001080) also rose 12.03% as it announced plans to acquire and cancel treasury stocks worth 3 billion won.
CS Wind (112610) rose 6.27% on the announcement that it had signed a wind power tower supply contract worth approximately 79.7 billion won with Vestas American Wind Technology of the United States.
Hyundai Motor Company (005380) rose 3.53% on expectations of easing tariff policies after the U.S. midterm elections, and Daedong Gear (008830) rose 6.11% on the news that Daedong Group is discussing building a Saemangeum agricultural robot production and demonstration facility with Hyundai Motor Group and Jeonbuk Province.
Jeju Air (089590) rose 13.75% on expectations of easing the burden of aviation fuel costs due to the decline in international oil prices.
Clean Country (004540) rose 29.93% to the upper limit on the news of Chairman Choi Hyun-soo switching to a sole representative system.
On the other hand, SK Hynix (000660) plunged 9.46% as concerns spread about strengthening regulations on AI data center construction and slowing memory demand after the U.S. midterm elections. Samsung Electro-Mechanics (009150) also fell 15.34% due to concerns about a slowdown in demand for electronic components due to a possible decline in U.S. data center investment.
SK Innovation (096770) fell 7.68% due to concerns about inventory valuation losses in the oil refining sector due to the plunge in international oil prices.
Sanil Electric (062040) plunged 17.23% as its third quarter performance fell below market expectations, and Ecopro BM (247540) also fell 7.72% due to poor third quarter performance.
GS P&L (499790) also plunged 16.12% as its third quarter performance fell below market expectations.
