[Edaily Reporter Shin Ha-yeon ] The domestic stock market plummeted by more than 5% on the 5th amid massive selling by foreign investors. Following the “Blue Tsunami”—in which the Democratic Party secured control of both the Senate and the House of Representatives in the U.S. midterm elections—concerns over potential new data center regulations came to the fore, triggering a sell-off centered on semiconductor and artificial intelligence (AI) infrastructure-related stocks. Sell-side circuit breakers were triggered consecutively on both the KOSPI and KOSDAQ.

According to MP Doctor on the 5th, the KOSPI closed at 5,383.80, down 300.00 points (5.28%) from the previous trading day, marking its lowest closing price since April 3 (5,377.30). The index opened at 5,580.09 that day but quickly extended its losses during the session, falling as low as 5,336.88. The intraday high was 5,586.46.

Heavy selling by foreign investors dragged the index down. On the KOSPI market, foreign investors posted a net sell of 3.4248 trillion won. In contrast, retail investors and institutional investors absorbed the selling pressure with net purchases of 2.2769 trillion won and 841.7 billion won, respectively.

Selling pressure was also concentrated in program trading. While arbitrage trading showed a net buying position of 341 billion won, non-arbitrage trading showed a net selling position of 2.2494 trillion won, resulting in an overall net selling position of 1.9085 trillion won.

During the sharp decline, sell-side circuit breakers were triggered in both the KOSPI and KOSDAQ markets. At 10:16 a.m. that day, the Korea Exchange suspended the validity of sell orders in program trading on the KOSPI market for five minutes after the nearest-month Mini KOSPI 200 futures contract fell 5.21% from the reference price of 890.44 points to 843.96 points and remained at that level for one minute. At that time, program trading recorded net sales of 660.8 billion won. This marks the 56th time a sidecar has been triggered on the stock market this year, with this being the 29th instance of a sell-side sidecar.

Subsequently, at 2:27 p.m., a sell-side sidecar was also triggered on the KOSDAQ market. The sell-side sidecar was triggered on the KOSDAQ market at 2:27 p.m., as the nearest-month KOSDAQ 150 futures contract fell 6.07% from the previous day and the KOSDAQ 150 Index dropped 5.43%, with both declines persisting for one minute, resulting in a five-minute suspension of sell orders in program trading. This marks the 35th time the sidecar has been triggered on the KOSDAQ market this year, with this being the 16th sell-side sidecar activation.

Among the top-market-cap stocks, semiconductor and AI infrastructure-related stocks saw particularly sharp declines. SamsungElectronics(005930)closed down 7.57% at 201,500 won, while SK hynix(000660)plummeted 9.46% to 1,264,000 won. SamsungElectronics(1P)(005935)(-6.58%) and SKSQUARE(402340)(-10.01%) also fell sharply.

In particular, SamsungElectroMechanics(009150)closed at 944,000 won, down 15.34%. This is interpreted as a sell-off concentrated across the entire domestic AI infrastructure value chain, driven by growing concerns that new data center permits and regulations on electricity and water usage could be tightened following the U.S. Democrats’ landslide victory.

On the other hand, some large-cap non-AI stocks remained strong. KB Financial Group(105560)rose 3.63%, HyundaiMotor(005380)rose 3.53%, and SAMSUNG BIOLOGICS(207940)rose 1.67%. In contrast, LG Energy Solution(373220)fell 2.54%.

By sector, medical and precision instruments plunged 11.48%. Following that, the electrical and electronics, manufacturing, machinery and equipment, distribution, construction, insurance, real estate, finance, chemicals, transportation and warehousing, securities, transportation equipment and parts, and metals sectors all closed lower. In contrast, entertainment and culture, IT services, and pharmaceuticals each rose by around 4%. The telecommunications, food, beverages, and tobacco, electricity and gas, general consumer goods, non-metals, and textiles and apparel sectors also posted gains.

Overnight, the New York stock market was generally strong amid easing political uncertainty following the U.S. midterm election results and expectations of falling interest rates and oil prices, though stock prices within the AI value chain were mixed. The Dow Jones Industrial Average rose 3.03%, the S&P 500 index rose 1.58%, and the Nasdaq index rose 1.44%, but the Philadelphia Semiconductor Index fell 3.13%. NVIDIA fell 3.17% and Micron dropped 7.00%, while hyperscalers such as Amazon and Microsoft posted gains.

Concerns grew as some Democrats raised the need for regulations on new data center construction, while the Democratic Party made gains in key data center hubs such as Texas. Caution spread to the domestic stock market as well, driven by the fear that if delays in data center construction materialize, order intake and revenue recognition for AI infrastructure suppliers—such as semiconductor and power equipment manufacturers—could be delayed.

The KOSDAQ index also closed at 678.41, down 36.54 points (5.11%) from the previous trading day. The index opened at 713.49 and hit an intraday low of 673.38. The intraday high was 717.06. The current level is the lowest since late July.

In the KOSDAQ market, foreign and institutional investors recorded net sales of 76 billion won and 102.4 billion won, respectively. Retail investors were the only group to make net purchases, totaling 172.1 billion won. Program trading, combining arbitrage and non-arbitrage trades, showed a net selling position of 183.2 billion won.