South Korea's KOSPI index fell 655.34 points (8.76%) last week (13-16th), closing at 6820.60 on the 16th and breaking below the 7000 level. The decline stemmed from supply shocks including leveraged ETF liquidations rather than fundamental deterioration, according to securities firms. The index's 12-month forward price-to-earnings ratio dropped to the mid-5x range, below levels seen during the financial crisis, while corporate earnings forecasts remained largely intact.
KOSPI Records 655-Point Weekly Decline
During the period from the 13th to 16th, institutional investors net sold 1.206 trillion won worth of stocks in the securities market, while individual and foreign investors net purchased 943.8 billion won and 214.6 billion won respectively, according to Korea Exchange. The semiconductor sector showed weakness alongside U.S. semiconductor stocks, with volatility amplified by single-stock leveraged ETF liquidations.
Lee Kyung-min, researcher at Daishin Securities, stated: "Despite the price adjustment in the semiconductor sector, earnings forecasts have not been significantly damaged. With improved valuation attractiveness following the sharp price decline, there is a possibility of bargain-hunting inflows during the earnings confirmation process."
Valuation Drops to Financial Crisis Levels
The KOSPI's 12-month forward price-to-earnings ratio recently fell to the mid-5x range, dropping below levels recorded during the financial crisis. Corporate earnings forecasts have not undergone significant downward revisions, indicating that price adjustments have progressed ahead of fundamentals.
SK Hynix Announces Earnings on the 24th
SK Hynix is scheduled to announce its earnings on the 24th. The company's 2026 and 2027 operating profit estimates currently stand at 274.2 trillion won and 401.3 trillion won respectively, after being revised slightly downward from 276.8 trillion won and 404.4 trillion won following Samsung Electronics' preliminary earnings announcement.
Lee Jae-won, researcher at Yuanta Securities, stated: "The direction of semiconductor demand, supply, and profits has not changed enough to justify this sharp decline. Through the earnings announcements of U.S. hyperscalers starting this week, it is necessary to confirm whether the existing investment logic has been damaged."
Global Tech Companies Report Earnings This Week
Alphabet, Tesla, and Intel are scheduled to announce earnings in the United States. Alphabet's AI investment plans are identified as a key variable that will influence domestic semiconductor investment sentiment.
FAQ
Q: What caused the KOSPI to fall below 7000 last week?
A: The KOSPI fell 655.34 points (8.76%) during the period from the 13th to 16th, closing at 6820.60 on the 16th. Securities firms attribute the decline primarily to supply shocks from leveraged ETF liquidations rather than fundamental deterioration, with institutional investors net selling 1.206 trillion won worth of stocks.
Q: When is SK Hynix scheduled to announce its earnings?
A: SK Hynix is scheduled to announce its earnings on the 24th. The company's 2026 and 2027 operating profit estimates currently stand at 274.2 trillion won and 401.3 trillion won respectively, after slight downward revisions from previous forecasts.
