The KOSPI fell below 7000 on the 13th with a nearly 9% drop and closed the week at 6820.60 on the 16th, down 463.81 points (6.37%), amid semiconductor peak-out concerns and supply-demand instability. The decline resulted from a combination of semiconductor sector weakness, geopolitical risks between the US and Iran, and questions about AI investment sustainability, according to securities analysts. Market attention is now focused on the Q2 earnings season, particularly Alphabet's results scheduled for announcement on the 22nd (local time), as investors seek confirmation of AI investment cycle sustainability.
KOSPI Records Sharp Weekly Decline with Heavy Foreign and Institutional Selling
On the 16th, individual investors alone net bought 3.6647 trillion won, while foreign investors and institutional investors net sold 1.3665 trillion won and 2.3831 trillion won respectively. Lee Kyung-min, a researcher at Daishin Securities, stated that "the recent extreme volatility in the KOSPI is interpreted as a result of the chain reaction of damaged investor sentiment due to the simultaneous weakness of Korean and US semiconductor stocks and the liquidation of leveraged investments amid deteriorating semiconductor supply and demand."
The KOSPI's 12-month forward PER (price-to-earnings ratio) fell to 5.78 times (as of the 13th), entering a historical valuation low. This is below the 6.27 times recorded at the low point of the 2008 financial crisis, according to Lee.
US Stocks and Philadelphia Semiconductor Index Enter Technical Correction
On the 17th (local time), the Dow Jones Industrial Average closed at 52,146.42, down 0.77% from the previous trading day at the New York Stock Exchange (NYSE). The S&P 500 index fell 1.01% to 7,457.69, and the technology-focused Nasdaq index dropped 1.40% to 25,520.24. The Philadelphia Semiconductor Index officially entered a technical bear market, falling more than 20% from its all-time high.
Analysts Attribute Decline to Technical and Supply Factors Rather Than Fundamental Changes
Lee Jae-won, a researcher at Yuanta Securities, noted that "both the US June CPI (Consumer Price Index) and PPI (Producer Price Index) fell below expectations, lowering concerns about interest rate hikes and the burden of financing costs for AI data center Capex (capital expenditure)." Lee added that "TSMC recorded record sales in the second quarter, and ASML also raised its performance and annual guidance, reconfirming AI logic and memory expansion demand and equipment bottlenecks."
Hwang San-hae, a researcher at LS Securities, stated that "in a tight macro environment, the market is in a phase of reconfirming Big Tech's financing capacity and AI investment sustainability in this earnings season."
Alphabet Q2 Earnings Announcement Scheduled for the 22nd
Alphabet, Google's parent company, is scheduled to announce its Q2 earnings on the 22nd (local time). Tesla will also announce its Q2 earnings on the same day. Microsoft and Meta earnings announcements are scheduled for the end of this month.
Kang Jin-hyuk, a researcher at Shinhan Investment & Securities, stated that "the cause of the recent stock market correction is skepticism about AI Capex and controversy surrounding the increase in memory profits," adding that "Capex guidance led by Alphabet is key, and if AI Capex sustainability is confirmed in Big Tech earnings announcements, there is a possibility that domestic semiconductor investment sentiment will improve."
FAQ
What happened to KOSPI stocks on the 13th?
The KOSPI fell below 7000 on the 13th with a nearly 9% drop, marking a significant decline amid semiconductor peak-out concerns and supply-demand instability.
When is Alphabet scheduled to announce its Q2 earnings?
Alphabet is scheduled to announce its Q2 earnings on the 22nd (local time), with Tesla also reporting on the same day and Microsoft and Meta earnings expected at the end of this month.
