KOSPI plunges 7.6% on ‘Black Thursday’, triggering circuit breaker, then rebounds 2% a day later
First seen · Oct 17, 4:04 AM (Seoul) · Last updated · Oct 17, 4:04 AM (Seoul)
South Korea’s KOSPI closed down 7.57% at 5,554.22 on Oct. 15 amid worries over the profitability of AI investment, as level-1 circuit breakers were triggered on both the KOSPI and KOSDAQ. On Oct. 16 the index rose 2.05% to 5,668.05, its first gain in eight sessions, though analysts remain cautious about a sustained recovery.
What happened
On Oct. 15 the KOSPI closed 454.59 points (7.57%) lower at 5,554.22, while the KOSDAQ fell 63.06 points (7.65%) to 760.82. A level-1 circuit breaker hit the KOSDAQ at around 12:23 p.m. and the KOSPI about 15 minutes later, halting trading for 20 minutes. The KOSPI was down 8.00% at 5,528.05 when the halt was triggered, and foreign investors were net sellers of 3.6243 trillion won on the main board that day.
Why it's trending
Renewed debate over whether AI investment will pay off sent chip heavyweights such as Samsung Electronics and SK hynix sharply lower. In the U.S., Treasury yields above 5% raised fears that financing massive AI infrastructure spending will become more expensive. It was the first time circuit breakers had been triggered on both markets since July 29, about two and a half months earlier.
Reactions
On Oct. 16 the KOSPI closed up 2.05% at 5,668.05, its first gain in eight sessions. SBS reported that market watchers remain cautious about whether the rebound marks a lasting upturn. Japan’s Nikkei also recovered 1.4% the same day after plunging 4.9% the session before.
What to watch
The Bank of Korea is set to announce its rate decision on Oct. 22 Korea time, and markets expect it to hold the base rate at 3%. China’s third-quarter GDP data, due on Oct. 18, could also sway Asian markets.