South Korea’s KOSPI opened higher on July 29, rising 1% to 2% at one point as traders looked for a rebound after the recent sell-off. Samsung Electronics even briefly turned positive and rose 2.50% intraday. The recovery attempt did not last an hour. The benchmark swung from gains to losses and triggered a second sell-side Sidecar, a temporary trading curb, shortly after 10 a.m. Before publication, KOSPI was down 7.5%.
Chip heavyweights led the decline. SK Hynix fell 12.89%, while Samsung Electronics dropped nearly 8%, deepening pressure on the broader market.
Previous session had already delivered a steep sell-off
In the prior trading day, KOSPI opened at 6,400.27 and closed at 6,023.63, a drop of 732.12 points or 10.84%. That marked the eighth circuit-break event of the year.
Samsung Electronics lost 13.58% in that session, its biggest one-day decline in nearly 20 years. SK Hynix dropped 14.48%.
KOSPI has now fallen 34% in July. Assets in Korean ETFs also shrank quickly, falling from more than KRW 500 trillion on July 1 to KRW 418 trillion on July 28, wiping out more than KRW 80 trillion in less than a month.
Three pressure points in focus
The report said it is difficult to say this correction already reflects a clear break in fundamentals, but retail sentiment has turned sharply volatile.
The first pressure point is movement in China’s memory sector. ChangXin Memory Technologies, or CXMT, surged 465% on its listing debut. At the same time, reports of progress in China’s domestic DUV lithography equipment raised fresh questions over how long the memory oligopoly led by Samsung Electronics, SK Hynix and Micron can hold.
The second is renewed concern that AI capital spending may be peaking. Alphabet posted negative free cash flow for the first time since its 2004 listing, with a gap of $5.9 billion. That added to doubts over whether massive spending on AI data centers by cloud providers can generate adequate returns. The concern spread into U.S. semiconductor stocks: the Philadelphia Semiconductor Index fell 4.49% for a fourth straight down day, while Micron lost 8.85%, AMD fell 8.15%, Intel dropped 5.86%, and Nvidia declined 4.99%.
The third is valuation pressure despite strong earnings. SK Hynix reported second-quarter operating profit up 557% year over year, but the figure still fell short of market expectations of KRW 64.68 trillion, suggesting optimism had already been priced in.