KOSPI tumbles 5.5% on 'Broadcom shock', falls below 8200

The KOSPI index plummeted 5.54% on June 5, closing at 8160.59, a sharp reversal from its earlier pursuit of the 9,000-point mark. The dramatic fall was primarily attributed to a 'Broadcom shock' originating from the United States, which rattled investor sentiment regarding AI semiconductor investments.

Broadcom's stock plunged 12.59% overnight after its second-quarter earnings fell short of market expectations and its annual revenue forecast was lowered. This downturn significantly impacted the semiconductor sector, with the Philadelphia Semiconductor Index dropping 2.15% and Micron Technology falling 7.74%.

The ripple effect was acutely felt in South Korea's market. Samsung Electronics, the KOSPI's bellwether, lost 6.4% to close at 329,000 won, while SK Hynix experienced a steeper decline of 9.92%, ending the day at 2,070,000 won. Stocks that had recently surged on expectations of Nvidia CEO Jensen Huang's visit also saw significant losses, with Naver down 4.49% and LG Electronics down 8.84%.

Foreign investors continued their aggressive selling spree, marking the 20th consecutive day of net sales with 3.5 trillion won offloaded on June 5. Institutions also contributed to the sell-off, offloading 900 billion won. "The burden of the won-dollar exchange rate increased, intensifying the foreign net selling," noted Lim Jeong-eun, an analyst at KB Securities. "Related stocks that had risen on expectations of Nvidia CEO Jensen Huang's visit saw profit-taking selling."

The KOSDAQ index also suffered a sharp decline, briefly dipping below 1,000 before recovering to close down 4.5% at 1002.44.

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The burden of the won-dollar exchange rate increased, intensifying the foreign net selling. Related stocks that had risen on expectations of Nvidia CEO Jensen Huang's visit saw profit-taking selling.