[Edaily Reporter Shin Ha-yeon ] The KOSPI opened down more than 2% but has since partially recovered during the session. This is believed to be due to dampened investor sentiment, driven by renewed skepticism regarding large-scale AI investments following the unveiling of the high-performance AI model “Kimi K3” by Chinese AI startup Moonshot AI, compounded by escalating military tensions between the U.S. and Iran.

According to MP Doctor on the 20th, as of 9:12 a.m. today, the KOSPI is trading at 6,752.00, down 68.60 points (1.01%) from the previous trading day. The index opened at 6,643.58, down 2.60% from the previous trading day, and although it fell as low as 6,515.24 during the session, it managed to partially recover its losses.

On the previous trading day, the 17th (local time), major U.S. stock indices closed lower across the board. On the New York Stock Exchange, the Dow Jones Industrial Average, which tracks blue-chip stocks, closed at 52,146.42, down 406.55 points (-0.77%) from the previous session, while the Standard & Poor’s (S&P)500 index, a benchmark for large-cap stocks, closed at 7,457.69, down 76.08 points (-1.01%) from the previous session, while the tech-heavy Nasdaq Composite Index closed at 25,520.24, down 361.70 points (-1.40%) from the previous session.

In particular, the Philadelphia Semiconductor Index fell 20% from its high on the 22nd of last month (closing price of 14,634.72), entering bear market territory. The unveiling of “Kimi K3,” a high-performance AI model by Chinese AI startup Moonshot AI, acted as a negative factor. As Kimi K3—released using an open-weight method—ranked among the top performers in global AI performance evaluations, expectations for lower AI development costs grew, triggering a flood of profit-taking selling in AI and semiconductor stocks such as NVIDIA. NVIDIA fell 2.21%, and major semiconductor companies such as Micron (-0.50%), AMD (-1.03%), and Intel (-2.00%) also saw across-the-board declines.

In addition, geopolitical risks in the Middle East weighed on investor sentiment. Concerns over an escalation of the conflict have grown since U.S. military personnel were killed in an Iranian attack on the 17th. The U.S. Central Command declared retaliation and carried out airstrikes for eight consecutive days, targeting radar, missile, and drone facilities, as well as energy and logistics infrastructure, on Iran’s Qeshm Island—a strategic stronghold in the Strait of Hormuz. International oil prices also surged, with both Brent and West Texas Intermediate (WTI) crude futures closing up by around 4%.

However, geopolitical tensions have escalated as armed clashes between the U.S. and Iran resumed over the weekend. The Islamic Revolutionary Guard Corps (IRGC) re-blockaded the Strait of Hormuz just 24 days after the U.S. and Iran signed a Memorandum of Understanding (MOU) on the 17th of last month, which called for the immediate reopening of the Strait of Hormuz upon the start of a 60-day ceasefire between the two sides.

Han Ji-young, an analyst at KIWOOM Securities, said “This week, the KOSPI is expected to enter a phase of testing its downside support, influenced by the weakness in U.S. and Japanese semiconductor stocks during the market closure, U.S.-Iran geopolitical tensions, earnings reports from U.S. Big Tech companies such as Alphabet, Intel, and Tesla, earnings from major domestic firms including HyundaiMotor, DOOSAN ENERBILITY, and KB Financial Group, and changes in supply and demand following the announcement of regulations on single-stock leverage,” she noted.

He continued, “The KOSPI’s 12-month forward price-to-earnings ratio (P/E) stands at 5.8x, a level that represents an excessive decline, having fallen to its lowest point in 20 years—including the low during the 2008 financial crisis,” and "Therefore, the market is expected to establish downside support in the low-to-mid 6,000-point range, and the key question is how much of the recent series of sharp declines can be recovered through major events scheduled for this week," the analyst assessed.

In terms of supply and demand, foreign investors and institutions are currently net buyers on the stock market, with 70.8 billion won and 53.5 billion won in net purchases, respectively. Retail investors are the only group showing net selling, at 134.5 billion won. Program trading, combining arbitrage and non-arbitrage trades, shows a net buying position of 255.2 billion won.

By sector, all sectors are trading lower. Insurance is down by around 6%, while retail and telecommunications are each down by around 5%. Following these, transportation equipment and parts, construction, finance, securities, machinery and equipment, IT services, metals, manufacturing, electrical and electronics, general services, chemicals, transportation and warehousing, entertainment and culture, food, beverages, and tobacco, and electricity and gas are all trading lower.

Among the top market-cap stocks, SamsungElectronics(005930)is trading at 255,000 won, down 500 won (0.20%) from the previous trading day. SK hynix(000660)is trading at 1,872,000 won, up 30,000 won (1.63%). In addition, SKSQUARE(402340)(0.25%) and SamsungElectroMechanics(009150)(3.21%) are also rising. On the other hand, HyundaiMotor(005380)(-4.35%), LG Energy Solution(373220)(-2.99%), SAMSUNG BIOLOGICS(207940)(-1.43%), Samsung Life Insurance(032830)(-5.44%), and KB Financial Group(105560)(-4.09%) are trading lower.

At the same time, the KOSDAQ market is trading at 779.45, down 12.39 points (1.56%) from the previous trading day. In terms of supply and demand, retail and institutional investors are net buyers of 200 million won and 2.4 billion won, respectively. Foreign investors are the only net sellers, with 2.4 billion won in net sales.

Top-market-cap stocks are showing mixed performance. SAM CHUN DANG PHARM CO. LTD(000250)is hitting the daily price limit (up 29.82%), while Alteogen Inc.(196170)(up 0.36%), JUSUNG ENGINEERING Co.,Ltd.(036930)(up 2.08%), Rainbow Robotics(277810)(up 2.02%), and WONIK IPS Co.,Ltd.(240810)(up 0.07%) are also trading higher. On the other hand, ECOPRO BM CO., LTD.(247540)(-3.11%), ECOPRO CO., LTD(086520)(-4.0%), PSK INC.(319660)(-2.61%), and HLB INC.(028300)(-8.50%) are trading lower.