Black Thursday: KOSPI plunges 7% amid AI spending fears

On Thursday, the Korean stock market, tracked by the KOSPI index, experienced a sharp decline of 7.57 percent, causing a significant loss of nearly 400 trillion won ($297.7 billion) in total market value. The benchmark KOSPI index closed at 5,554.22, down by 7.57 percent from the previous close. This dramatic drop marked the 27th activation of the sell-side sidecar mechanism this year, and a Level 1 circuit breaker was triggered at 12:38 p.m., as the index fell by at least 8 percent from the previous day's close.

Foreign investors played a significant role in the market's downturn, with a net selling of 3.6 trillion won worth of shares, extending their losing streak to eight consecutive trading sessions. Despite the overall market sentiment being negative, institutional investors and retail investors managed to step in, making net purchases of 1.69 trillion won and 1.29 trillion won, respectively. This buying activity occurred at discounted prices, attempting to stabilize the market.

However, market heavyweights, such as Samsung Electronics, were particularly hard hit by the downturn. The company's shares fell by 9.48 percent, closing at a lower value compared to the previous day. The heavy selling pressure affected the performance of other major companies in the market, contributing to the overall decline in the KOSPI index.