[Seoul Market Wrap] South Korea's KOSPI Plunges 3.73% as Foreign and Institutional Investors Bleed Under Heavy Selling

Market Turmoil: AI Concerns and Geopolitical Jitters Send Stocks Plummeting

On the 20th, South Korea's stock markets witnessed a simultaneous decline in both the KOSPI and KOSDAQ indices. Growing worries over AI investments and an unstable international political climate dampened investor sentiment, leading to a downturn across both markets after three consecutive days of gains.

According to the Korea Exchange, the KOSPI closed at 5,552.74, a decrease of 215.27 points (3.73%) from the previous trading day. The KOSDAQ ended at 781.97, down 26.92 points (3.33%). The won-dollar exchange rate closed the week at 1,328.1 won per dollar, a slight decrease of 2.2 won from the previous day's rate.

The KOSPI opened in the red, influenced by credit risks and profitability concerns surrounding AI-related companies, as well as broader global geopolitical tensions. During the trading session, the won strengthened, and foreign investors and institutions intensified their selling pressure on transportation equipment and parts, as well as the electric and electronics sectors, resulting in a sharp 3% drop.

Market Turbulence: Sector Performance and Trading Activities

Various sectors experienced significant declines, with transportation equipment and components leading the drop at 6.6%, followed by medical and precision devices at 6.4%, and chemicals at 6.1%. Large-cap stocks fell by 3.8%, mid-caps by 3.3%, and small-caps by 2.2%.

In terms of market flow, foreign investors and institutions were net sellers, offloading shares worth ₩541 billion and ₩10.01 billion, respectively. Conversely, individual investors were net buyers, snapping up ₩9.03 billion worth of shares. Foreign Investors notably sold off in the electrical and electronics sector (₩3.38 billion), transportation equipment and components (₩1.06 billion), and chemicals (₩419 million).

The Kosdaq index opened lower despite the previous day's rise in the US Nasdaq and Philadelphia Semiconductor indices. Large-cap biotech and secondary battery-related stocks weakened, leading to an expanded decline. Financials dropped by 5.7%, non-metals by 4.5%, and construction by 4.3%. Foreign and institutional investors were net sellers, unloading shares worth ₩1.86 billion and ₩1.11 billion, respectively, while individual investors were net buyers, acquiring ₩2.94 billion worth of shares.

Bear Market: Robots and Order Book Strength

In the midst of the market turmoil, G2G Bio (456160) surged 14.91% on news of a contract to evaluate its 'InnoLamp' sustained-release injection platform for a new drug candidate from China's UBT.

Market Movers: Late-Session Selling Pressure and Margin Call Liquidations

Korea Circuit (007810)

Korea Circuit witnessed a remarkable surge of 12.40%, driven by improved quarterly performance forecasts and elevated target prices from securities firms. The company's prospects for the third quarter have sparked optimism among investors.

Yest (122640)

Yest experienced a notable gain of 5.61%, attributed to the anticipated surge in operating profit for the third quarter, fueled by the expansion of its high-pressure hydrogen annealing (HPA) equipment sales. This positive outlook has attracted market attention.

Energy Storage System (ESS) Contracts Drive Stock Prices Higher

#### Unitechno (241690)

Unitechno's shares rose by 6.67% in early trade, following news of its selection as a supplier of parts for North American ESS by a global battery manufacturer. This development has further solidified the company's position in the ESS market.

#### Vinatech (126340)

Vinatech saw a substantial increase of 11.83%, attributed to the signing of a significant supply contract with ACBEL, a Taiwanese company. The deal, worth 123 billion KRW, equates to 149.60% of Vinatech's previous year's revenue, and is for the provision of supercapacitors for data centers. This contract highlights the company's commercialization efforts and market expansion.

Robot-Related Stocks Gain Traction

#### Everybot (270660)

Everybot's shares surged by 9.22%, driven by expectations surrounding its AI-powered autonomous robot business. The company's innovative approach to robotics has captured the market's interest.

#### HT Robotics (396300)

HT Robotics experienced a notable rise of 7.13%, as investors focused on the company's order backlog and its potential impact on future performance. This interest highlights the market's confidence in the company's growth prospects.

#### Big Wave Robotics (0035S0)

Big Wave Robotics witnessed an impressive spike of 23.97%, following the announcement of its AI-based robot automation platform launch. This strategic move positions the company at the forefront of robotic automation, attracting significant investor attention.

Market Movers and Shakers

Hyungji Elite (093240) saw a remarkable 30.00% surge, hitting the daily limit-up, thanks to the reprieve from delisting procedures due to its market cap shortfall and the subsequent stock consolidation.

Defense and Shipbuilding Stocks Plunge; AI Investment Concerns Persist

Hyundai Rotem (064350) suffered a sharp 13.70% drop as its third-quarter operating profit missed market expectations, compounded by uncertainties surrounding overseas defense contracts.

LSeco energy (229640) declined by 14.59%, driven by concerns over the expansion of AI infrastructure investments. SK Hynix (000660) faced a 4.23% decline amid controversy over the potential duplicate listing of its subsidiary, Solidaim, on the U.S. Nasdaq.

Newly Listed on KOSDAQ

Ellis Group (0158S0), newly listed on the KOSDAQ market, closed the day at a 32.04% decline compared to its IPO price of KRW 95,000.