KOSPI plunges 7% as retail investors absorb 19 trillion won in sell orders: "Samsung Electronics earnings are coming soon"

[Financial News] For the first time in history, the circuit breaker mechanism was triggered twice in a single week, and South Korea's stock market plunged more than 7% over the past week. The drop came as foreign investors and institutions unloaded shares ahead of first-half earnings season, while short-term overheating in artificial intelligence (AI) semiconductor stocks added pressure.
According to the Korea Exchange on the 29th, the KOSPI ended last week, from the 22nd to the 26th, at 8,411.21, down 7.08% from the previous week. Over the same period, the KOSDAQ also fell more than 11%. Expectations that the index could approach 10,000 after the signing of a ceasefire memorandum between the United States and Iran were shaken within a week by the sharp decline in semiconductor stocks and the widening of foreign selling.
In the KOSPI Market last week, foreign investors and institutions sold a net 16.6372 trillion won and 3.061 trillion won, respectively, dragging the index lower. Retail investors, meanwhile, bought a net 19.1511 trillion won on their own, absorbing the sell-off. Investor Deposits also remained at a record-high 126.9924 trillion won, showing that buying power was waiting on the sidelines.
In particular, leveraged ETFs tied to Samsung Electronics and SK hynix were cited as major drivers of the heightened volatility during the selloff. Trading in these products has surged recently, and analysts say that small-scale selling noise from foreign portfolio rebalancing at the end of the half-year amplified mechanical selling in the spot market several times over.
Still, securities analysts say the semiconductor industry’s structural growth trend remains solid. Micron in the United States posted results far above market expectations, prompting a reappraisal of the memory industry as a structural growth sector rather than merely a cyclical one.
Accordingly, brokerages have set this week's KOSPI range at 8,400 to 9,500, saying that whether second-quarter earnings forecasts are revised higher will strongly support the lower end of the index. South Korea June import and export trends, due out on July 1, are drawing attention as the consensus for semiconductor export growth reaches 55.7% year on year. The U.S. employment report, to be released on the 2nd, is also being watched as a key indicator for gauging uncertainty over Federal Reserve monetary policy.
This week, the market is expected to look to South Korean exports, U.S. employment data, and Samsung Electronics' preliminary earnings on July 7 for direction.
gaa1003@fnnews.com Ahn Ga-eul Reporter