KOSPI plunges 5.46% as foreign selling drives valuations to record low

The Korean stock market's KOSPI suffered a significant drop of 5.46 percent on Tuesday, driven by heavy foreign selling and a decline in sentiment towards semiconductor stocks. This marked the index's lowest 12-month forward price-to-earnings ratio on a closing basis. At the close, the KOSPI stood at 6,035.35, representing a 5.46 percent decrease from its previous valuation.

A sell-side sidecar triggered at 9:47 a.m., marking the 26th activation this year. The index had fallen below the 6,000 mark during the trading session before recovering slightly before the closing bell. Foreign investors were responsible for the bulk of the selling, with a net outflow of 4.51 trillion won ($3.36 billion). Meanwhile, institutional and retail investors showed a net buying interest, with purchases totaling 1.69 trillion won and 2.23 trillion won, respectively.

Semiconductor stocks were the primary culprits behind the market's downturn, with SK hynix experiencing a steep 10.09 percent decline to 1,443,000 won and Samsung Electronics following suit with a 7.39 percent drop to 232,000 won. Reports from The Financial Times suggested OpenAI's annualized revenue had fallen to $50 billion, a notable 30 percent reduction from the previously reported $70 billion.

Other factors contributing to the market's sentiment include Toshiba's plans to expand its hard disk drive (HDD) production and CXMT's upcoming launch of new server memory products.