[Edaily Reporter Kim Yoon-jung] The KOSPI plunged more than 5% in early trading, falling below the 8,000 mark. This was driven by a flood of profit-taking across artificial intelligence (AI) semiconductor stocks following a more than 12% plunge in Broadcom, a leading U.S. semiconductor stock. A sell-side circuit breaker was triggered on the KOSPI market, and the KOSDAQ also fell more than 3%, raising concerns about a collapse of the "1,000-point KOSDAQ."

According to MP Doctor on the 5th, as of 9:30 a.m., the KOSPI was trading at 8,163.25, down 476.16 points (5.51%) from the previous trading day. The index opened at 8,323.20 and fell as low as 8,083.54 during the session.
In terms of market participants, foreign investors and institutions led the decline, net selling 1.3006 trillion won and 264.7 billion won worth of stocks, respectively. In contrast, retail investors net bought 1.4677 trillion won worth of stocks, taking advantage of the dip. Foreign investors have now recorded net selling for 20 consecutive trading days, from the 7th of last month through today.
Overnight, U.S. stock markets closed mixed. The Dow Jones Industrial Average rose 1.73% to 51,562.16, setting a new all-time high based on the closing price, while the S&P 500 also gained 0.41%. In contrast, the Nasdaq Composite closed down 0.07%.
Broadcom was the catalyst that shook the market. Broadcom plummeted 12.6% on assessments that its AI semiconductor revenue outlook fell short of market expectations, marking its largest single-day drop since January of last year. Consequently, profit-taking spread across the broader semiconductor sector, and major semiconductor stocks such as Micron also fell.
Han Ji-young, an analyst at Kiwoom Securities, noted, “While the negative news from Broadcom has increased volatility in semiconductor stocks, this correction is not driven by fundamental issues such as a deterioration in the memory market or a sharp rise in interest rates, but rather reflects strong profit-taking following a recent sharp rally.”
She added, “The domestic stock market is expected to open lower today due to weakness in U.S. semiconductor stocks and concerns over the won-dollar exchange rate breaking through the 1,530 won level, but it is projected to recover its intraday losses as sector rotation shifts from semiconductors to non-semiconductor stocks.” It also explained, “The KOSPI also showed a pattern yesterday of sharply falling during the session but narrowing its losses as the closing bell approached,” adding, “The domestic stock market can be seen as entering a consolidation phase following the recent steep rise in the index.”
At 9:08 a.m. today, the sell-side circuit breaker was triggered on the KOSPI market. According to the Korea Exchange, the price of the front-month KOSPI 200 futures contract fell 5.20% from the previous trading day to 1,309.56, meeting the trigger criteria. Consequently, the effectiveness of program sell orders was suspended for five minutes.
By sector on the KOSPI, retail (-9.50%), electrical and electronics (-6.44%), manufacturing (-5.70%), insurance (-5.09%), and IT services (-4.83%) saw sharp declines. In contrast, declines were relatively limited in Food & Beverage/Tobacco (1.65%), Securities (-0.23%), and Pharmaceuticals (-0.17%).
Most of the top KOSPI market cap stocks are also trading lower. #Samsung Electronics, the top market cap stock, is trading at 329,500 won (-6.26%), while #SK Hynix, the second-largest, is trading at 2,111,000 won (-8.14%).
Other declining stocks include #SK Square (-9.33%), #Hyundai Motor (-5.43%), #Samsung Electro-Mechanics (-3.26%), #LG Energy Solution (-2.25%), #Samsung Life Insurance (-7.42%), #Samsung C&T (-15.14%), and #Hyundai Mobis (-8.42%). In contrast, #HD Hyundai Heavy Industries (1.38%) is maintaining an upward trend.
The KOSDAQ market is also continuing its sharp decline. At the same time, the KOSDAQ index is down 38.06 points (3.63%) to 1,011.67. The intraday low was 1,007.60.
In the KOSDAQ market, institutions and retail investors are net buyers of 72.4 billion won and 5.3 billion won, respectively, while foreign investors are net sellers of 76.9 billion won.
Most of the top-cap stocks on the KOSDAQ are also down. #Alteogen, the top-cap stock, is trading at 338,500 won (-2.31%), and #Ecopro BM, the second-largest, is trading at 187,500 won (-5.02%).
In addition, #EcoPro (-4.97%), #Rainbow Robotics (-5.88%), #Juseong Engineering (-10.98%), #Kolon TissueGene (-4.11%), #Rino Industrial (-4.32%), #Wonik IPS (-7.15%), and #HLB (-1.71%) are all showing weakness.