Korean Stock ETFs Plunge at Open as AI Trade Doubts and U.S. Rate Hike Expectations Trigger Massive Foreign Exit from Korean Equities

Stock News
10/15

Korean stock ETFs opened sharply lower, with the CSOP SK Hynix Daily Leveraged 2X Product (07709) falling 14.99% to HK$20.98 and the CSOP Samsung Electronics Daily Leveraged 2X Product (07747) dropping 14.97% to HK$48.72 as of press time.

On October 15, South Korea's KOSPI index plunged more than 7%, with SK Hynix and Samsung Electronics declining over 10% and 7% respectively, weighed down by concerns over artificial intelligence investments and expectations of U.S. rate hikes.

U.S. September CPI rose 3.7% year-on-year, exceeding the market expectation of 3.6%, while core CPI climbed to 2.6%, fueling speculation that the Federal Reserve will raise interest rates further.

Meanwhile, yields on some CoreWeave corporate bonds have risen to approximately 15%, signaling that credit markets are growing increasingly wary of financing risks tied to AI infrastructure.

Notably, data from the Korea Exchange on October 14 showed that foreign investors had cumulatively net sold 203.6977 trillion Korean won (approximately US$141.5 billion) in the KOSPI main board market so far this year through the previous trading day.

Among these, Samsung Electronics and SK Hynix together accounted for approximately 176 trillion Korean won in net selling, representing about 86% of total foreign outflows. The foreign ownership stake in Samsung Electronics has fallen to its lowest level since 2008.

Analysts believe that a combination of factors—including escalating geopolitical risks in the Middle East, disputes over OpenAI's annual revenue, and concerns about the rising competitiveness of foreign companies—are weighing on the market.

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