KOSPI tumbles 3.59% as AI jitters outweigh lower oil prices [fn Market Close]

[Financial News] The KOSPI fell more than 3% as foreign investors and institutions both posted net sales. Caution ahead of the U.S. midterm elections, compounded by concerns about the cost of investing in artificial intelligence (AI), triggered a wave of selling, particularly in semiconductor stocks. The KOSDAQ also fell more than 4%, edging close to the 700 mark.
According to the Korea Exchange (KRX), the KOSPI closed at 5,648.79 on the 3rd, down 210.29 points (3.59%) from the previous trading day. After rising 2.24% the day before, the index opened lower and extended its losses, giving back its gains from the previous session.
On the KOSPI market, retail investors were net buyers of 2.5954 trillion won. Foreign investors and institutions, by contrast, were net sellers of 2.0295 trillion won and 864.8 billion won, respectively. Their combined net sales totaled 2.8943 trillion won.
By sector, entertainment and culture (0.62%), pharmaceuticals (0.58%), and paper and wood (0.55%) advanced, while medical and precision instruments (-7.60%), machinery and equipment (-5.00%), and electrical and electronics (-4.76%) declined. 
Among the top companies by market capitalization, Samsung Biologics (1.34%) and Kia Corporation (0.42%) rose. Samsung SDI (-8.64%), Samsung Electro-Mechanics (-7.04%), Doosan Enerbility (-6.46%), SK Square (-5.47%), and LG Energy Solution (-5.06%), meanwhile, fell.
Large-cap semiconductor stocks also weakened in tandem. Samsung Electronics fell 9,500 won (4.15%) from the previous trading day to close at 219,500 won. SK hynix ended at 1,398,000 won, down 74,000 won (5.03%).
The KOSDAQ closed at 704.39, down 29.97 points (4.08%) from the previous trading day. Retail investors were net buyers of 371.9 billion won, while foreign investors and institutions were net sellers of 125.7 billion won and 236.3 billion won, respectively.
Among the KOSDAQ’s top companies by market capitalization, Hugel (3.11%), Peptron (2.32%), and Alteogen Inc. (0.47%) rose. Robotis (-9.98%), PSK Holdings (-9.73%), EO Technics (-9.32%), Jusung Engineering (-7.68%), and Wonik IPS (-7.14%), by contrast, posted steep losses.
Despite the decline in international oil prices, a string of reports that major U.S. tech companies were raising funds appears to have dampened investor sentiment. Renewed concerns over the cost of financing AI infrastructure investment prompted domestic semiconductor and IT hardware stocks to turn lower in a single session. Refining and chemical stocks also underperformed amid the sharp drop in oil prices.
Selling by foreign investors and institutions hit both markets at the same time, broadening the declines. In both the KOSPI and KOSDAQ, rising stocks accounted for less than 25% of all listed stocks.
Market analysts expect concerns about policy changes to persist after the U.S. midterm elections. However, they say the likelihood of a shift in the Federal Reserve’s policy stance and the likelihood that data-center regulations will actually dampen investment are limited.
In its closing report, KB Securities said, "Despite the sharp drop in oil prices, selling focused on technology stocks continued amid a string of fundraising announcements from hyperscalers," and analyzed that "net selling by foreign investors and institutions in both markets increased pressure on supply and demand."   


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