[R&E] KOSPI Plummets 9.99%; Samsung Electronics and SK Hynix Weakness Driven by US Semiconductor Correction and Deferred MSCI Inclusion

[R&E: Research & Epoch] This is News Epoch's signature report that provides a perspective on a new era of investment through an integrated analysis of global financial data and domestic securities firm research.

Global Market Brief

The U.S. stock market recorded a decline yesterday, led by large-cap tech stocks and the semiconductor sector. The S&P 500 closed at 7,365.46p, down -1.44% from the previous day, and the tech-heavy Nasdaq also finished the trading session at 25,587.04p, down -2.21%. On the other hand, the Dow Jones remained in slightly bearish territory, closing at 51,666.84p, down -0.09% from the previous day, thereby relatively limiting its extent of decline. The main cause of the drop was the emergence of short-term profit-taking sell-offs from global semiconductor companies that had continued their accumulated upward trend. In particular, memory semiconductor manufacturer Micron Technology (NASDAQ: MU) fell -13.18% from the previous day, leading the tech stock correction, and the Philadelphia Semiconductor Index also dropped -7.87% from the previous day. This is the result of concerns over the prolonged global interest rate freeze and the possibility of a slowdown in demand for core hardware devices affecting investor sentiment. The U.S. tech stock correction became the catalyst that exacerbated the pressure for foreign capital outflow in emerging markets, including South Korea.

Domestic Market Overview

The domestic stock market underwent a massive correction yesterday due to a combination of heavy foreign selling and unfavorable global macroeconomic factors. The KOSPI closed at 8,203.84p, down -9.99% (-910.71p) from the previous day, recording the fifth-largest daily drop rate in history. In terms of the extent of the drop, it is the largest ever. A circuit breaker was activated in the KOSPI market during intraday trading, and the KOSDAQ also closed at 891.52p, down -7.94% from the previous day, resulting in the activation of sidecars in both markets.

In terms of supply and demand, foreign investors recorded net selling in the trillions for two consecutive days in the KOSPI spot market, dumping a total of 2.4 trillion won worth of spot shares. Foreigners particularly concentrated about 1 trillion won in net selling on SK Hynix(KOSPI: 000660) and SK Square(KOSPI: 402340), leading the index decline. In addition, the deferral of South Korea's inclusion on the watchlist for the developed market index in MSCI's 2026 Annual Market Classification Review acted as a systemic headwind. MSCI pointed out that further improvements are needed in five areas, including the level of liberalization in the South Korean foreign exchange market and the foreign investor registration system. The combination of the U.S. semiconductor stock correction and systemic uncertainty intensified the decline of domestic large-cap IT companies. Even after the market opens today, Wednesday, June 24, the volatility of the KRW/USD exchange rate, which closed at 1,533.10 won in the previous night market, and whether foreign supply and demand will return remain key variables that will determine the market's direction.

Key Industry Issues and Insights

Semiconductor Industry: The Function of Short-term Price Elasticity and Supply Chain Realignment

Despite domestic semiconductor export value from June 1 to 20 surging 188.4% year-on-year to $25.5 billion and continuing an all-time high trend, Samsung Electronics(KOSPI: 005930) closed yesterday down -12.31% and SK Hynix down -12.47% from the previous day. This is because global semiconductor tech stocks underwent a concurrent correction in the U.S. stock market yesterday, with Micron Technology falling -13.18% from the previous day, along with the impact of pace-adjusting movements across the overall supply chain, such as Taiwan's TSMC announcing plans to reduce its 28nm process production volume by more than 25% starting in early 2026. However, actual indicators for the memory industry remain solid. The DDR5 16G spot price stands at $46.50, up +0.72% from the previous day and +11.6% from the previous month, maintaining a strong trend. This suggests that the current stock price decline is not due to a slowdown in actual demand for memory semiconductors or a deterioration of industry conditions, but rather a temporary deleveraging phase triggered by macroeconomic anxiety factors. The profit stamina of South Korean semiconductor companies is proven by export indicators, and performance differentiation centered on high value-added memory is expected to begin in earnest following the short-term supply and demand correction.

Pharmaceutical & Bio Industry: Global Territorial Expansion of New Drug Platform Technologies

Following the US FDA, Yuhan(KOSPI: 000100)'s Gaucher disease treatment candidate 'YH35995' was designated as an orphan drug by the European Medicines Agency (EMA), and SK Biopharmaceuticals(KOSPI: 326030) signed a joint development agreement for a neuroimmune new drug worth up to 4 trillion won with AI drug discovery company Insilico. Additionally, Amicogen(KOSDAQ: 092040) saw its stock price rise +17.37% from the previous day as it decided on a third-party allotment paid-in capital increase of 10 billion won along with a change in its largest shareholder. This is because the demand for the transfer of innovative new drugs and platform technologies is continuously increasing in the global healthcare market, with 6 out of the top 10 global technology transfer contracts over the past 5 years occurring in the oncology field. This indicates that domestic pharmaceutical and bio companies are moving beyond the stage of simple generic drug production to prove their proprietary innovative new drug candidates and high value-added platform technologies to the global market. Orphan drug designations by global organizations and large-scale technological partnerships serve as mid-to-long-term drivers that enhance the external negotiating power of domestic companies.

Construction & Infrastructure Industry: Contrasting Fortunes of Large Order Warmth and Overseas Tax Risks

While DL E&C(KOSPI: 375500) saw its stock price drop by -20.14% from the previous day after receiving notice of an 853.3 billion won corporate tax penalty from the Saudi Arabian tax authorities, Hyundai E&C(KOSPI: 000720) secured an 850 billion won redevelopment project for the Beomcheon 4-guyok in Busan. In the domestic housing market, primarily in the metropolitan area, weekly apartment sale prices continue to show a solid trend, rising 0.27% in Seoul and 0.20% in the metropolitan area. This is because country-specific tax risks associated with the execution of large overseas projects acted as a headwind for individual companies, while at the same time, strong demand for maintenance projects centered on the metropolitan area and warmth in the pre-sale market are offsetting the downward pressure. This indicates that even within the construction sector, the differentiation of individual company stock prices will be maximized depending on portfolio diversification and the ability to manage unexpected risks. It is judged that the phenomenon of order concentration centered on excellent large companies with financing capabilities will be strengthened.

Steel & Materials Industry: Strengthening Trade Barriers and Diversification of Procurement Portfolios

Amid strengthening global protectionism, such as the EU's plans to reduce the tariff-rate quota (TRQ) for steel from the existing 33.82 million tons to 18.35 million tons—a cut of about 46%—and to raise the excess tariff from the existing 25% to 50%, POSCO International(KOSPI: 047050) successfully issued a 5-year global bond worth $500 million on the condition of adding 90bp to the U.S. Treasury yield. It drew high interest from overseas investors, attracting $2 billion in orders, which was four times the public offering amount. Furthermore, POSCO Holdings(KOSPI: 005490) recorded a consolidated operating profit of 707 billion won in the first quarter, representing a +24.3% increase year-on-year. This demonstrates that even in a situation where existing export routes are shrinking due to strengthened trade regulations, the financing capabilities of large companies with excellent credit ratings and eco-friendly asset portfolios are still recognized in the overseas capital market. In a phase of rising global barriers, qualitative growth centered on companies that have completed their own supply chain innovation and portfolio diversification remains valid.

Retail & Consumer Goods Industry: Distribution Network Efficiency and the Earnings Defensive Power of Essential Consumer Goods

In the retail market yesterday, BGF Retail(KOSPI: 282330) closed up +8.2% and GS Retail(KOSPI: 007070) closed up +3.6% from the previous day, while the annual transaction amount of CJ Freshway(KOSDAQ: 051500)'s online food ingredients platform 'Sikbom' exceeded 200 billion won. This is because, as the high-inflation situation prolongs, the phenomenon of consumers preferring short-distance channels such as convenience stores over large discount stores has become evident, and the demand for cost reduction using digital platforms has increased in the food service ingredients distribution market estimated to be worth about 43 trillion won. This proves that even in a phase of slowing domestic demand, companies that have efficiently diversified their retail platforms and dominated essential consumption trends are demonstrating robust earnings defensive power.

Market Signals

• Foreign net selling of 2.4 trillion won: Foreign investors recorded net selling in the trillions for two consecutive days in the KOSPI market, net selling a total of 2.4 trillion won in spot shares.

• Continued robust semiconductor exports: Domestic semiconductor export value from June 1 to 20 recorded $25.5 billion, marking a 188.4% increase year-on-year.

• DL E&C imposed with massive penalty: With the Saudi tax authorities imposing a corporate tax penalty of 853.3 billion won on DL E&C, the stock price dropped -20.14% from the previous day.

• POSCO International's global bond success: Orders totaling $2 billion, four times the public offering amount, were concentrated in POSCO International's $500 million global bond offering.

• DDR5 spot price strength: The DDR5 16G spot price recorded $46.50, up +0.72% from the previous day and +11.6% from the previous month.

Epoch View: Investment Implications

The plunge in the domestic stock market yesterday is a classic example of supply and demand deleveraging combined with a global tech stock correction and systemic uncertainty. The trillion-won-scale foreign selling and the KOSPI's 9.99% drop stimulated excessive concerns in the market, but semiconductor export indicators and the upward trend in high-end memory spot prices prove that the profit-generating ability of key domestic industries remains solid. The deferral of inclusion on the watchlist for the MSCI developed market index induced short-term supply and demand anxiety, but it is merely an occasion that reaffirmed the task of accelerating the structural improvement of the South Korean capital market. Amid the pressure of a rapid outflow of global funds, stock price polarization based on individual companies' actual fundamentals and global financial stability will further intensify. However, until the foreign capital outflow subsides, there is a need to be wary of expanded short-term volatility and the possibility of further correction. Ultimately, the main game is expected to resume at a point when macroeconomic sentiment calms down and supply and demand return to leading companies that demonstrate substantive profit growth within the global supply chain.

This content was written through News Epoch's proprietary AI algorithm, which tracks and analyzes public data from research centers of major domestic securities firms and global financial media in real-time. We clarify that this is an objective summary based on the collected data, and not a solicitation or recommendation for investment in any specific stocks.