- South Korean stocks plunged for a second straight session on Wednesday, wiping as much as US$2.18-trillion from Seoul’s equity market.
- The benchmark KOSPI index dived as much as 12.6 per cent before closing down 6 per cent, extending a near-11 per cent rout from the previous day.
- Despair and frustration spread across the South Korean retail-investing community as stocks cratered again Wednesday, with the decline in the nation’s key equity index this month reaching a record 33%.
- Even blockbuster earnings from SK Hynix, which reported a six-fold jump in profit, failed to stem the panic as the results lagged lofty expectations.
- The chipmaker’s shares slumped nearly 20 per cent before recovering some ground, closing down 9.6 per cent, while Samsung Electronics fell as much as 14 per cent before trimming losses to 5.2 per cent.
South Korea's stock market is facing unprecedented turmoil, with the Kospi Index experiencing a staggering decline of over 16% in just two days.2
On Wednesday, the index dropped as much as 12.6% before closing down 6%, following a near-11% plunge the previous day.
This dramatic downturn has wiped out approximately US$2.18 trillion from the equity market, marking a record monthly decline.
Retail investors, particularly those who are leveraged, are feeling the brunt of this market crash.
Disappointment surrounding earnings from major companies like SK Hynix, which reported a six-fold profit increase, has exacerbated the situation, as the results fell short of high expectations.4
SK Hynix's shares plummeted nearly 20% before recovering slightly to close down 9.6%, while Samsung Electronics also faced significant losses, dropping as much as 14%.5
The panic selling was further fueled by fears that the once-promising AI sector is now facing a harsh market correction, leading to widespread despair among investors.
As hopes for a market rebound faded, many investors were forced to book losses, contributing to the ongoing volatility.
“The benchmark KOSPI Index dropped as much as 6.5%, extending its decline this month to a record 33%. Despite a six-fold jump in profit, SK Hynix's disappointing results led to a nearly 20% slump in its shares, exacerbating the market's turmoil.”
The Globe and Mail
