Kospi Ends Just Above 5,000 as Foreign Selling Erases Early Rebound

Monday's close left the index just above the 5,000 level it fell through briefly on Friday, the first time it had traded below that mark since February. Seoul's market leans heavily on Samsung Electronics and SK hynix, whose memory chips go into AI servers. That makes it one of the markets most exposed to any slowdown in US data centre construction. Elsewhere in Asia, Japan's Nikkei 225 rose 2.33% and Taiwan's market also recovered on Monday, while Korea lagged.

Foreign investors were net sellers of 658 billion won on Monday and retail investors sold a net 511 billion won, according to The Korea Times. Institutions bought a net 719 billion won, about $533 million. The two chipmakers both closed slightly higher. Samsung Electronics gained 0.64% to 189,900 won and SK hynix rose 0.35% to about 1.14 million won. The tech-heavy Kosdaq fell 0.82% to 638.97, while the won strengthened by 9.5 won to 1,347.1 per dollar.

The selling began after the Democrats won the US midterm elections on November 3. Investors worried that a Democratic Congress, together with local opposition to data centres' power and water use, could slow the AI infrastructure projects that drive demand for Korean memory. Analysts named Texas, Georgia and Ohio as the states most at risk of new permitting restrictions.

The Kospi fell 5.28% on Thursday and another 6.02% on Friday, closing that day at 5,059.69. On Friday it dropped as far as 4,911.28, down 8.78%, shortly after the open, which triggered a circuit breaker, the Korea Herald reported. Samsung Electronics closed Friday down 6.35% at 188,700 won, roughly half its 2026 peak of 374,500 won. SK hynix fell 10.44% to 1.132 million won, and its intraday low that day was about a third of its peak this year. The Kospi itself hit a record 9,114.55 on June 22 and has since lost nearly half its value.

Several Korean analysts argued that the reaction had gone too far. "The likelihood of AI data center construction coming to a complete halt is limited," Lee Kyung-min of Daishin Securities said. He put the chance of new project suspensions in Texas, Georgia and Ohio at 15% to 30%, and said higher costs and construction delays were the bigger risks. Lee Jun-young of Eugene Investment & Securities said fears of both a sharp fall in AI investment and a severe US slowdown were "excessive at this point."

Others expect the recovery to take time. "A sideways trend is more likely than a V-shaped rebound in the near term," Kim Dae-jun of Korea Investment & Securities said. He told investors not to expect AI stocks to repeat their past returns, and suggested health care and secondary batteries as sectors that could benefit from the Democrats' agenda.

Financial news site TradingKey described the 5,000 level as a policy floor for the index. It listed US consumer and producer price data and memory chip spot prices as the next tests of whether Samsung and SK hynix can lead the market higher. Nvidia, the biggest buyer of the high-bandwidth memory that both companies make, reports quarterly results later this month.