South Korea's stock market rally has stalled as chip stocks lose ground, wiping more than 200 trillion won ($147 billion) off its combined market capitalization over the past month.
The benchmark Kospi's market capitalization stood at 5,464.31 trillion won, while the Kosdaq's totaled 455.08 trillion won at Tuesday's close, bringing the combined market capitalization of the two markets to 5,922.87 trillion won.
The figure represents a decline of over 200 trillion won from 6,234 trillion won on Aug. 14. The decline was even steeper compared with June 22, when the Kospi was approaching its all-time high.
Market heavyweights Samsung Electronics and SK hynix drove the sharp decline in the Kospi's market capitalization, with both companies’ market cap falling back into the 1,000 trillion won range, after each had exceeded 2,000 trillion won.
Samsung Electronics' market capitalization stood at 1,449.87 trillion won on Tuesday, down nearly 30 percent from its peak of 2,119.28 trillion won on June 18. SK hynix's market value came to 1,233.8 trillion won, down around 40 percent from its June 22 peak of 2,080.38 trillion won.
The market value wipeout comes as retail and foreign investors have been offloading shares amid growing uncertainty over the chip sector's outlook.
Calls from some AI companies to slow the pace of artificial intelligence model development have also fueled concerns over the sustainability of the AI boom and its implications for chip demand.
According to the Korea Exchange, retail investors net sold 3.98 trillion won worth of Samsung Electronics shares and 6.23 trillion won worth of SK hynix shares between Sept. 1 and Tuesday, offloading roughly 10 trillion won worth of shares in the two stocks alone.
Foreign investors have also added to the selling pressure, net selling 3.11 trillion won of Samsung Electronics shares and 5.05 trillion won in SK hynix shares over the same period.
Meanwhile, other corporations, which have emerged as major buyers following large-scale share buybacks by the two chipmakers, recorded net purchases of 5.59 trillion won and 11.99 trillion won worth of Samsung Electronics and SK hynix shares, respectively.
silverstar@heraldcorp.com
