There Was No "Black Monday"... KOSPI Rises Despite Sharp Drop in U.S. Stocks

KOSPI Opens Down 1.6% but Reverses Course to Gain Intraday
Semiconductors, Led by SK hynix, Drive Gains
Many Non-Semiconductor Companies Report Weak Earnings; Investors Need to Separate Winners from Losers

The KOSPI opened down more than 1.6% amid the fallout from a sharp sell-off in U.S. tech stocks, but staged a strong recovery early in the session and turned higher. The KOSDAQ also managed to turn higher. On Nov. 2, stock market indices are displayed in the dealing room at Hana Bank's headquarters in Jung-gu, Seoul. Nov. 2, 2026. Photo by Kim Hyunmin.

The KOSPI, which opened lower amid concerns about the profitability of the artificial intelligence (AI) industry, managed to turn higher during the session. The index plunged 16% last month alone amid the AI debate, and analysts say bargain hunters stepped in after the drop was seen as excessive given companies' strong earnings. However, some say investors need to distinguish between stronger and weaker sectors, as many listed companies outside the semiconductor industry reported third-quarter results below expectations.

KOSPI Opens Down 1.6% but Reverses Course to Gain During the Session

The KOSPI opened at 5,637.77 on Nov. 2, down 1.62% from the previous trading day, but reversed course to trade at 5,766.71 as of 10:02 a.m., up 0.63%. The KOSDAQ also began the session down 1.10%, but was trading at 724.61 as of 10:03 a.m., up 0.03%.

South Korean stocks opened lower, tracking a sharp decline on Wall Street last Friday, led by AI-related shares. On Oct. 30, the Dow Jones Industrial Average fell 1.09%, while the S&P 500 fell 1.82%. The Nasdaq Composite plunged 2.86%, and the Philadelphia Semiconductor Index dropped 7.20%.

Doubts about the returns on AI investments following earnings reports from big tech companies prompted a broad sell-off in U.S. technology stocks. Intel's share price plunged 28.58% after the company reported third-quarter results and issued a fourth-quarter outlook that fell short of market forecasts. Expectations that NAND price growth at Japan's Kioxia would slow, along with slower earnings growth at China's ChangXin Memory Technologies, also weighed on sentiment toward semiconductor investments. Blackstone's warning that Anthropic could struggle to secure an investment-grade credit rating after an initial public offering (IPO) was another negative factor. Most semiconductor stocks fell, including Nvidia (-4.22%), Micron (-5.30%), AMD (-10.88%), and SK hynix American depositary receipts (ADRs) (-7.95%).

"Intel's weak earnings outlook heightened concerns about profitability across the semiconductor industry. The market was also shaken by Japanese NAND maker Kioxia's forecast for operating profit in the next quarter, which was about 15% below market expectations," said Seo Sang-young, a vice president at Mirae Asset Securities.

Semiconductors, of all sectors, led the KOSPI's recovery after it opened lower in response to the U.S. market. As of 10:08 a.m., SK hynix was trading at 1,451,000 won, up 2.33% from the previous trading day. Shares in other major semiconductor companies were also higher, including SK Square (2.12%), Samsung Electro-Mechanics (0.33%), Hanmi Semiconductor (4.60%), and Samsung Electronics (0.23%). Semiconductor stocks also posted notable gains on the KOSDAQ, including Jusung Engineering (3.94%), EO Technics (1.16%), SIMMTECH (3.88%), Wonik IPS (4.07%), and Leeno Industrial (2.32%).

Analysts say bargain hunters are entering the market after concerns about AI spread to the semiconductor sector, sending the KOSPI down 16.19% and the KOSDAQ down 15.37% last month alone. Many also consider current share prices significantly undervalued, given the strong earnings of Samsung Electronics and SK hynix and their commitment to shareholder returns. "Considering companies' earnings forecasts and solid fundamentals, we believe the market has entered oversold territory," said Han Ji-young, an analyst at Kiwoom Securities. "For the market to rise further, the extent to which forecasts for KOSPI companies' operating profit, including those of semiconductor companies, are revised upward for next year and beyond will be important."

Many Companies Outside Semiconductors Report Weak Results... Sector-by-Sector Share Price Divergence Likely to Continue

Share price divergence across sectors is expected to continue as the third-quarter earnings season gets underway. About half of the major listed companies that have reported third-quarter results so far have fallen short of expectations. Samsung Electronics and SK hynix lifted the combined operating profit of listed companies, but other companies failed to meet market expectations.

According to financial information provider FnGuide, an analysis of 47 listed companies that have reported results and for which at least three securities firms had issued earnings forecasts found that 22 companies reported operating profit below consensus. By sector, wholesale and retail companies, including Hotel Shilla, came in 4.3% below consensus; shipbuilding companies, including HD Korea Shipbuilding & Offshore Engineering, were 7.0% below; machinery companies, including HD Construction Equipment, were 7.7% below; pharmaceutical companies, including Yuhan, were 18.4% below; and durable goods companies, including LG Electronics, were 24.1% below. In contrast, construction companies, including SAMSUNG E&A, exceeded consensus by 51.2%; telecommunications equipment companies, including RFHIC, by 37.6%; electronic equipment and instruments companies, including LG Energy Solution, by 31.9%; diversified industrial companies, including Samsung C&T, by 13.9%; and semiconductor and related equipment companies, including Samsung Electronics, by 4.3%.

Companies whose operating profit fell significantly short of consensus included LG Innotek (-51.9%), Hanmi Pharmaceutical (-42.5%), BNK Financial Group (-26.8%), LG Electronics (-24.1%), ISC (-20.7%), iM Financial Group (-14.7%), SGC Energy (-12.1%), RF Materials (-11.0%), ST Pharm (-10.7%), and Hyundai Rotem (-10.5%). LG Innotek posted operating profit of 94.8 billion won, less than half its forecast of 197.3 billion won. The company said profits fell because exchange rates plunged while raw materials purchased at high exchange rates in the first half of the year were being shipped in the third quarter.

Semiconductor leaders also determined the third-quarter results of listed companies. The combined operating profit of the 47 companies was 210.9308 trillion won, 3.8% above consensus of 203.2094 trillion won. Samsung Electronics and SK hynix accounted for 90.4% of that total, or 190.7743 trillion won. The other 45 companies recorded combined operating profit of 20.1564 trillion won, 0.4% below the forecast of 20.2424 trillion won.

This content was produced with the assistance of AI translation services.