SK Hynix Shares Plunge 9% After Nasdaq Debut, Triggering KOSPI Sell-Off

SK Hynix experienced a dramatic plunge in its stock price, falling by nearly 9% and dropping below the 2 million won mark during trading on November 13. This significant decline occurred despite the company's recent successful listing on the Nasdaq through its American Depositary Receipts (ADRs) on November 10.

The sharp fall in SK Hynix's stock triggered a sell-off sidecar on the KOSPI index, a mechanism designed to halt trading temporarily when prices fall rapidly. The KOSPI itself saw a substantial drop of over 5%, trading at 7090.50 points by mid-morning. This marks the fourth instance of a sell-off sidecar being activated on the stock exchange this month.

Major semiconductor stocks led the downturn. SK Hynix's affiliate, SK Square, fell by 12.07%, and its holding company, SK Inc., dropped by 8.98%. Samsung Electronics also experienced a decline of 5.61%, trading at 269,000 won. Other related companies like Samsung Electro-Mechanics saw a steep drop of 14.33%.

Analysts had initially expected SK Hynix's Nasdaq listing to boost investor sentiment for the South Korean semiconductor sector. However, concerns about the sustainability of the semiconductor supercycle appear to persist. Furthermore, recent brokerage reports forecasting SK Hynix's second-quarter earnings to fall short of consensus expectations likely exacerbated the sell-off.

In contrast, the KOSDAQ index showed more resilience, falling by a smaller margin of 1.41%. Analysts attributed this relative stability to the concurrent strength in materials, components, and equipment stocks, as well as the secondary battery sector.

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The recent consecutive sharp drops in semiconductor stocks are making investors sensitive to even slightly negative news or reports.