KOSPI plunges on concerns over slowing U.S. AI investment; circuit breaker and sell-sidecar triggered [fn Morning Market]

[Financial News] The KOSPI plunged more than 8% early in the session, falling below the 5,000 mark on concerns over a slowdown in U.S.-driven investment in artificial intelligence (AI) infrastructure. Trading was halted by a Level 1 circuit breaker, and a sell-sidecar was triggered shortly after trading resumed. Samsung Electronics and SK hynix fell sharply, while foreign investors are net sellers of more than 860 billion won in the KOSPI market.
According to the Korea Exchange (KRX), the KOSPI was trading at 5,023.39 on the morning of the 6th, down 360.41 points (6.69%) from the previous trading day. At 9:03 a.m., it had fallen as low as 4,924.61, down 459.19 points (8.52%) from the previous trading day, triggering a Level 1 circuit breaker. It was the 11th such trigger this year and the 17th on record.
The circuit breaker halted trading for 20 minutes in all KOSPI-market-listed securities except bonds. Trading resumed after a 10-minute single-price auction, but a sell-sidecar was triggered at 9:34 a.m. At the time, the nearest-month mini KOSPI 200 futures contract fell 6.77%, from a reference price of 837.80 to 781.00. It was the 30th sell-sidecar triggered in the KOSPI market this year; after it was triggered, the effectiveness of sell orders in program trading was suspended for five minutes.
In the KOSPI market, institutions and individual investors are net buyers of 611.1 billion won and 102.7 billion won, respectively. Foreign investors are net sellers of 866.5 billion won.
By sector, pharmaceuticals are edging up 0.61%. By contrast, securities (-8.83%), medical and precision instruments (-8.43%), machinery and equipment (-8.08%), electrical and electronic equipment (-7.87%), and insurance (-7.80%) are among those falling sharply.
Most of the largest stocks by market capitalization are lower, with Samsung Biologics (2.17%) the exception. Samsung Electro-Mechanics (-11.44%), SK Square (-10.01%), Samsung Electronics preferred shares (-6.48%), and LG Energy Solution (-1.73%) are among those falling. Samsung Electronics was trading at 187,400 won, down 14,100 won (7.00%) from the previous trading day, while SK hynix was at 1,150,000 won, down 114,000 won (9.02%).
The KOSDAQ was at 639.90, down 38.51 points (5.68%) from the previous trading day. Institutions are net buyers of 113.5 billion won, while individual and foreign investors are net sellers of 78.7 billion won and 35 billion won, respectively. A sell-sidecar was also triggered in the KOSDAQ market at 9:06 a.m., as KOSDAQ 150 futures and the KOSDAQ 150 index plunged 7.84% and 8.10%, respectively.
In the U.S. market overnight, selling focused on semiconductor stocks amid continued concerns about tighter data-center regulations following the midterm elections, compounded by Qualcomm's weak earnings outlook and news that Micron had halted construction of a plant in Taiwan. The Philadelphia Semiconductor Index plunged 12.3%, while the Nasdaq fell 5.5%.
Analysts say investor sentiment deteriorated sharply before the specific scope of data-center regulations and whether they would actually delay projects had been confirmed. Han Ji-young, an analyst at KIWOOM Securities Co., Ltd., said, "The plunge in AI stocks in the U.S. market the previous day was largely driven by panic selling," adding, "We need to see whether major U.S. cloud companies change their capital investment plans and whether earnings forecasts for semiconductor stocks at home and abroad for 2028 are revised downward."
  

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