Desperation and frustration spread among South Korea’s retail investors on Wednesday as stocks tumbled again, extending the country’s main stock index’s slide to a record 33 percent this month, Bloomberg notes. The Kospi index fell as much as 13% during a highly volatile session, triggering an automatic circuit breaker for the second consecutive day after disappointing results reported by SK Hynix Inc. have further exacerbated the already fragile sentiment surrounding the development of the infrastructure for artificial intelligence. Although the index later pared its losses, it still closed down 6%, a 16% decline in just two days. You may also be interested: Late on Wednesday, authorities promised additional measures to stabilize the market and limit retail investors’ access to leveraged ETFs after the market crash wiped billions of dollars from the value of investors’ holdings.The Finance Minister of South Korea apologizes to the people who lost massively on the stock market. The country recently introduced the possibility of leveraged investments on individual shares, fueling a historic boom, but also an equally spectacular decline The wave of optimism that had transformed South Korean shares into the best performers in the world at the beginning of this year is quickly fading. Investors are increasingly questioning the economic justification for the massive investment pouring into the industry and are also worried about the technological advances made by Chinese competitors. Those fears prompted retail investors to sell $1.4 billion worth of Kospi-listed stocks on Wednesday, a volume higher than the capital outflows recorded among foreign investors. «I’ve just been in hell,» said Kim Beom-jin, an individual investor in Seoul who owns shares in several South Korean companies, including Samsung Electronics Co. He added that his friends, who used to talk about the stock market every day, had become unusually quiet as the market crash «left us speechless.» Social media was abuzz on Wednesday with posts from users sharing screenshots from brokerage apps, showing the decline in the value of their accounts. On Threads, one user described how his financial situation reversed this week: profits that had once exceeded 600 million won ($414,000) turned into a cumulative loss of 700 million won. Another user, whose losses reached 40%, lamented the fact that he invested his wedding savings on the stock market. «People just seem to be running away,» said Yoon Joonwon, fund manager at DS Asset Management. «It is difficult to understand such a level of selling, especially among retail investors. From a technical or emotional point of view, it is an irrational situation.» Shares in SK Hynix tumbled as much as 20 percent in morning trading after the company’s earnings conference call ended without much detail on shareholder returns and long-term customer contracts. The company said it would increase capital spending to at least $31 billion after reporting a six-fold rise in quarterly profit. The stock later pared its losses and ended the day down 9.6%. The drop in the two chipmakers’ shares reflects both extremely high expectations surrounding the companies essential to the artificial intelligence industry and growing concerns that tech giants such as Meta Platforms Inc. they build more data centers than they need. Investors are now awaiting the financial results of Samsung Electronics, which are due to be published on Thursday, as well as the results of other major US technology companies, scheduled for this week. The activation, for the second consecutive day, of the 20-minute circuit breaker for the Kospi index is an unprecedented event. Of the 15 situations in which this mechanism was triggered since 2000, nine occurred this year. The Kosdaq index, which tracks small and medium-sized companies, also saw trading halt for the second straight session.
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