Kospi Falls 3.48% to 5,730.74 as Chip Stocks and Kia Slide
Key Facts
The Kospi closed down 3.48% at 5,730.74 on October 30 in a broad decline led by semiconductor stocks and Kia, according to SBS News. The index had ended the previous session at 5,937.66, according to EL7 data. Local pressure coincided with losses in U.S. tech stocks in the previous session, with the Nasdaq Composite down 1.38% and the Philadelphia Semiconductor Index down 1.4%, according to Yonhap as cited by The Korea Herald. Kia shares also fell after the company reported operating results below analysts’ expectations. Trading showed net selling by foreign investors, while individual investors and the National Pension Service bought shares.
The sell-off extended to South Korea’s leading chipmakers, with Samsung Electronics down 3.02% and SK Hynix down 7.08%, according to SBS News. A sidecar circuit breaker was briefly triggered in the Kospi market during the morning, signaling the severity of the decline in trading. Kang Jin-hyuk, an analyst at Samsung Securities, said investors had shed shares in companies linked to artificial intelligence after a series of weaker-than-expected third-quarter results from major tech companies and chipmakers. He added that concerns over the sustainability of AI-driven growth had added pressure on those stocks. Losses in U.S. indexes in the previous session reflected the pullback in investor appetite for the tech sector before its impact spread to the South Korean market.
Kia recorded one of the steepest declines among South Korean stocks, with its shares falling 11.73% to 95,600 won on October 30, according to The Korea Herald and Yonhap. The drop followed the company’s report of third-quarter operating profit below analysts’ expectations. Operating profit reached 1.818 trillion won, up 24.3% year over year, while consolidated revenue rose 10.1% to 31.597 trillion won, according to EDaily. The year-over-year comparison showed growth in both measures, while profit fell short of analysts’ expectations. Kia attributed the decline in profitability to higher raw-material costs and sales disruptions in the Middle East and North Africa. Higher material costs reduced operating profit by 368 billion won, while sales disruptions in the region cut it by 209 billion won.
Pressure on South Korean tech stocks followed a difficult day for Alphabet, which reported results on October 28. The company’s third-quarter revenue was $127.58 billion, up 25% year over year, but below analysts’ average estimate of $127.97 billion, according to The Associated Press. By contrast, Google Cloud revenue rose 103% to $30.7 billion, while net income was $26.2 billion and earnings per share were $2.12, according to Alphabet’s filing with the U.S. Securities and Exchange Commission. Despite growth in the company’s revenue and cloud computing unit, its Class A shares fell 12.6% on October 29, their worst daily performance since trading began more than 20 years ago, according to The Associated Press. Kang said weaker-than-expected results from tech companies and chipmakers, along with doubts about the sustainability of AI growth, had prompted investors to reduce their holdings in related stocks.
In terms of flows, foreign investors were net sellers of shares worth 1.6 trillion won on October 30, while individual investors were net buyers of 630 billion won and the National Pension Service bought 900 billion won, according to SBS News. Purchases by those two groups did not stop the sell-off, which left the index at 5,730.74 at the close. The decline followed an earlier drop in the Kospi on October 22, when it fell 3.52% and erased the previous session’s gains amid broad stock selling, according to EL7 data. Kia said a significant improvement in profitability in the fourth quarter would not be easy. The warning puts the company’s next results under pressure from raw-material costs and regional sales disruptions, while concerns about AI growth continue to weigh on South Korean tech stocks.