Japan Stocks Closed, Kospi Tumbles Over 3% as SK Hynix and Samsung Electronics Plunge 5%
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During Asian trading hours on November 3, South Korean equities plunged as the KOSPI dropped 3.59% to 5,648.79 points, pressured by heightened risk aversion ahead of U.S. midterm elections and spillover effects from U.S. chip stock sell-offs. Major semiconductor stocks suffered heavy losses, with Samsung Electronics down 4.59% and SK Hynix tumbling 5.71%. Institutional investors reduced risk exposure amid political and regulatory uncertainties. While the Japanese market remained closed for Culture Day, it faces potential catch-up declines upon reopening. Resolution of U.S. election results could clear uncertainties and encourage capital to flow back into regional risk assets.
TradingKey - Risk aversion surges on U.S. midterm election day; Japanese market closed while KOSPI plunges 3.59% below 5,700 points, with SK Hynix tumbling 5.71%.
During Asian trading hours on November 3, the Japanese stock market was closed for the national holiday 'Culture Day', while South Korean stocks were hit by a double whammy of risk aversion on U.S. midterm election day and aftershocks from a sell-off in U.S. chip stocks, opening sharply lower in the morning and remaining volatile and sluggish throughout the day.
The KOSPI closed down 3.59% at 5,648.79 points, falling below the 5,700-point level; Samsung Electronics plunged 4.59% to close at 218,500 won, losing the 220,000 mark; SK Hynix's drop widened to 5.71% at the close, standing at 1,388,000 won.
KOSPI index chart, Source: TradingView
Today (November 3) marks the official polling day for the U.S. midterm elections. With the battle for seats in both the Senate and the House reaching a white-hot phase, alongside unresolved directions on tech subsidies and regulatory bills, multinational institutional investors chose to systematically reduce risk exposure prior to the official announcement of ballot results, as sidelined capital locked in liquidity, dragging down the high-beta South Korean market.
As the results of the U.S. midterm elections trickle in later today through tomorrow, the clearing of political uncertainty is expected to encourage sidelined capital to flow back into risk assets, potentially sparking a post-election recovery in South Korean stocks. While the Japanese market avoided a sharp drop today due to the holiday, a catch-up decline may occur when trading resumes tomorrow.
This content was translated using AI and reviewed for clarity. It is for informational purposes only.
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