Rare Smiles Fade as Samjeon, SK Hynix, and Kakao Plunge

Philadelphia Semiconductor Index Drops 6%
Growth Stock Sentiment Quickly Cools in One Day
"Rebound Difficult Without Earnings Momentum"

[Asia Economy Reporter Minji Lee] The US Consumer Price Index (CPI) shock that devastated the global stock market last June has reoccurred, causing Samsung Electronics and SK Hynix, which had shown an upward trend the previous day, to plummet in just one day. As uncertainty over interest rate hikes grows, investor sentiment toward growth stocks is rapidly cooling.

As of 10:15 AM on the 14th, Samsung Electronics was trading at 56,800 KRW, down 2.24% from the previous trading day. Earlier in the session, Samsung Electronics even fell to 56,100 KRW. At the same time, SK Hynix dropped 2.64%. This was influenced by the poor performance of major global semiconductor companies, causing the Philadelphia Semiconductor Index to plunge more than 6%. The previous day, Samsung Electronics and SK Hynix had surged over 4% thanks to a buying spree by foreign investors, but they gave back their gains in just one day.

At the same time, NAVER (-4.19%), Kakao (-3.71%), KakaoBank (-3.36%), Kakao Games (-3.67%), and Krafton (-2.61%), which had shown gains the previous day, also continued to decline. Initially, securities experts predicted a short-term rebound in growth stocks, citing the drop in international oil prices leading to lower gasoline prices, but these forecasts did not materialize.

In the case of semiconductors and growth stocks, since the price increases were driven mainly by expectations, more time is expected before a rebound occurs. For stock prices to rise, earnings must support them, and the semiconductor sector is expected to see an improvement in business conditions only by the second half of next year. Kwangjin Kim, a researcher at Hanwha Investment & Securities, analyzed, "Considering weak demand in the front-end market and rising inventory levels among memory companies, the downcycle will continue until the first half of next year. Current stock prices reflect the possibility of a slowdown in business conditions until the first half of next year, but the bottom of the cycle has not been fully confirmed."

The same applies to internet service companies like Kakao and NAVER, as well as gaming stocks. Even looking at the external environment, if interest rate hikes continue, the valuation discount for growth stocks compared to other stocks will inevitably widen. Jonghwa Sung, a researcher at Ebest Investment & Securities, diagnosed, "Considering the earnings, new releases, and new business momentum of internet and gaming stocks, they are not strong enough to overcome the impact of the external environment and are rather underperforming."

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