[Opening Market] KOSPI Plunges into 6,400 Range as Selling Intensifies

At 9:50 a.m. on August 19, the KOSPI stock market experienced a sharp decline, driven by a coordinated selling spree from foreign and institutional investors. The KOSPI index opened at 6,528.77, a 4.96% decrease from the previous trading day, and plummeted further to 6,491.62, dropping below the 6,500 mark. The lowest point reached was 6,400.81, indicating a rapid loss of investor confidence.

Korea Exchange initiated a sell sidecar (Program Trading Sale Halt) at 9:06 a.m. to curb the market's aggressive selling. Despite the halt, the market's downward momentum persisted, showcasing the intensity of the selling pressure.

The decline was attributed to a convergence of factors, including a weak overnight performance in the U.S. stock market due to high oil prices, volatile interest rates, and profit-taking in AI and semiconductor technology stocks. Overseas markets' anxiety also impacted domestic stocks, particularly affecting semiconductor stocks, which further dragged down the index.

Foreign and institutional investors' selling dominated the market, with foreign investors netting 563.5 billion won ($398.1 million) in stock sales, primarily from top semiconductor and IT stocks. Institutional investors also contributed to the selling pressure, netting 21.4 billion won.

Individual investors, however, tried to capitalize on the market's downturn, buying stocks worth 577.7 billion won. Despite their efforts, their buying power was insufficient to counter the massive selling from foreigners and institutions. Among the top semiconductor stocks, Samsung Electronics and SK hynix took the brunt of the crash, falling 6.98% and 8.42%, respectively.

The plunge also affected other large-cap stocks in sectors like automobiles, secondary batteries, and bio, as well as securities firms such as Mirae Asset Securities, Kiwoom Securities, NH Investment & Securities, and Samsung Securities, all experiencing declines in the 5-7% range.

The KOSDAQ index also experienced a sharp decline due to the downturn in major technology stocks, secondary batteries, and pharmaceutical and bio sectors. While some top market capitalization semiconductor equipment stocks managed to show a slight upward trend, the overall market remained in a weak trend. The Korean won's exchange rate against the dollar (won/dollar) showed increased volatility during the trading session, fluctuating between 1,413 won and 1,415 won.

The depreciating won and rising geopolitical risks, along with concerns over the Federal Reserve's interest rate policies, contributed to the weak won trend and hindered foreign supply and demand in the domestic stock market. Experts attributed the market crash to global technology stock corrections, rising volatility in the foreign exchange market, and significant profit-taking volumes from foreign investors.