South Korean stocks suffered a sharp weekly decline as the KOSPI index dropped 612.40 points, or 7.57%, from 8088.34 to 7475.94 during the period from April 6 to April 10. The selloff was triggered by concerns that semiconductor earnings growth may have peaked following Samsung Electronics' second-quarter results, despite the company posting strong performance figures. Escalating military tensions between the United States and Iran in the Middle East further dampened investor sentiment, with Iran attacking commercial vessels in the Strait of Hormuz and the US conducting retaliatory strikes on Iranian targets. The severity of the decline led to the activation of trading halts, including two consecutive sell-side circuit breakers and one full market circuit breaker, as selling pressure concentrated in semiconductor stocks.
KOSPI Records 7.57% Weekly Decline Amid Semiconductor Concerns
According to the Korea Exchange, the KOSPI index fell from 8088.34 to 7475.94 between April 6 and April 10, representing a 612.40-point or 7.57% decline. On April 7, the index closed at 7656.31, down 395.02 points or 4.91% from the previous session, while the KOSDAQ dropped 15.84 points or 1.87% to 831.23.
The market downturn occurred despite Samsung Electronics announcing strong second-quarter earnings. Investor concerns centered on whether semiconductor earnings growth rates had reached their peak, prompting profit-taking across the sector. The selling pressure was severe enough to trigger two consecutive sell-side circuit breakers and one full market circuit breaker.
The geopolitical situation in the Middle East added to market volatility. Iran's attack on commercial vessels passing through the Strait of Hormuz prompted US airstrikes on Iranian targets, with Iran responding in kind. Market participants expressed concerns that the escalating conflict could undermine the existing ceasefire agreement between the two nations.
ASML and TSMC Earnings Scheduled for April 15-16
Market participants are focusing on upcoming earnings releases from global semiconductor companies and US inflation data as potential catalysts for market direction. ASML is scheduled to report earnings on April 15, followed by TSMC and Seagate on April 16. These announcements precede month-end earnings releases from major technology companies including Google, Microsoft, and Amazon.
Analysts view the guidance provided by these semiconductor companies as critical in addressing peak-out concerns. US economic data releases are scheduled for April 14-16, including the Consumer Price Index (CPI), Producer Price Index (PPI), and retail sales figures. If CPI growth slows as anticipated, analysts expect reduced pressure from interest rates and dollar strength, which could support domestic stock market recovery. Conversely, higher-than-expected inflation readings could intensify downward pressure on equities.
Analysts Cite Historical Undervaluation Levels
Lee Kyung-min, head of FICC research at Daishin Securities, stated that "the KOSPI is currently in a historically undervalued phase in terms of valuation." He added that "as the index has fallen below important support levels, it may take time for a trend reversal, but this is a level where sharp rebounds are possible even with minor positive catalysts."
NH Investment & Securities projected a KOSPI trading range of 6900-7900 points for the week, suggesting that "share prices will likely undergo a wide box-range pattern for the time being before attempting an upward move." Na Jung-hwan, a researcher at NH Investment & Securities, noted that "for a sustained price recovery, earnings forecasts need to be revised upward, and events supporting continued AI demand and expanded capital expenditure by big tech companies are necessary." He added that "meaningful rebounds will appear after fund outflows driven by price volatility unrelated to fundamentals are absorbed."
FAQ
What caused the KOSPI to fall 7.57% during April 6-10?
The KOSPI dropped 612.40 points from 8088.34 to 7475.94 due to concerns that semiconductor earnings growth had peaked following Samsung Electronics' second-quarter results, combined with escalating US-Iran military tensions in the Middle East. The decline triggered two sell-side circuit breakers and one full market circuit breaker.
When are ASML and TSMC scheduled to report earnings?
ASML is scheduled to announce earnings on April 15, while TSMC and Seagate are set to report on April 16. These releases precede month-end earnings announcements from major technology companies including Google, Microsoft, and Amazon.
What is the expected KOSPI trading range according to analysts?
NH Investment & Securities projected a KOSPI trading range of 6900-7900 points, suggesting the index will undergo box-range trading while the market evaluates semiconductor sector fundamentals and absorbs selling pressure before attempting a sustained recovery.
