Markets
The Kospi Fell 2.5% on Tuesday, SK Hynix Headed for Its Lowest Close Since April, and a Korean AI Data-Centre IPO Plunged 32% on Debut
One day after reversing a 3.2% opening loss, Seoul's Kospi fell 2.5% on October 20 as SK Hynix lost 3.5% and Samsung Electronics 1.8%. Elice Group, which raised 201.1 billion won, opened 16.4% below its 90,500-won IPO price and traded as low as 61,000 won. The Nikkei fell 0.5%, the Hang Seng 1% and the ASX 200 0.8%, while Jakarta rebounded 2.3%.
Monday's recovery in Seoul lasted one session. The Kospi was down 2.5% in Tuesday afternoon trading on October 20, after falling 2.6% by lunchtime, according to Investing.com and TT News Agency, giving back most of the 1.42% gain that had followed its reversal from a 3.2% opening loss on Monday. SK Hynix fell 3.5% and was heading for its lowest closing level since April; Samsung Electronics fell 1.8%. The reason given by every report was the same one that sank the index 18.8% in the first half of October: doubt about whether the companies building AI data centres can finance them at today's interest rates.
The sharpest evidence came from the primary market. Elice Group, an AI company that has expanded from an education platform into cloud services and GPU data centres, listed on the Kosdaq on Tuesday after pricing its initial public offering at 90,500 won, the top of a 70,400 to 90,500 won range, and raising 201.1 billion won, about $150 million. Institutional demand had covered the book 388.84 times and retail subscriptions 408.26 times, with more than 10 trillion won of deposits placed. The shares opened at 75,700 won, 16.4% below the offer price, fell as far as 61,000 won, 32.6% below it, and were last quoted at 65,300 won, down 27.8%, according to Investing.com. Last week Australia's Nvidia-backed Firmus shelved a planned $5 billion IPO.
The rest of the region was lower but calmer. The Nikkei 225 fell 0.5% and the Topix 0.9%; the Hang Seng lost 1% and the CSI 300 0.3%, while the Shanghai Composite was little changed after the People's Bank of China kept its one-year loan prime rate at 3.00% and the five-year at 3.50% for a seventeenth month. Australia's ASX 200 fell 0.8%, with National Australia Bank down about 3% after announcing restructuring charges and plans to cut 2,500 jobs by mid-2027; New Zealand's NZX 50 lost 0.4%, Singapore's Straits Times Index 0.4% and India's Nifty futures 1%. In Taiwan, TSMC slipped 0.4% while Foxconn rose 1.1%. The MSCI Asia Pacific index was down 0.8%.
The exception was Jakarta, where the composite index rebounded 2.3% to 3.2% after a two-day fall of about 15% that had taken it below 5,000 for the first time in six years, as the exchange and the government announced measures in response to MSCI's proposal to downgrade Indonesia from emerging-market status. US futures were steady, with Nasdaq 100 futures up 0.1% and S&P 500 futures up 0.2%, after Monday's 1.11% gain in the Nasdaq and the first rise in the Philadelphia Semiconductor Index in nine sessions.
What Tuesday shows is that Monday's buyers in Seoul were not a new source of demand, only institutions and foreigners closing shorts and rebalancing after the worst week for Samsung and SK Hynix since 2008. Korea's chip exporters are the market's most direct bet on AI capital spending, and that spending is decided in the earnings calls of the next ten days: Lam Research and Meta on Wednesday, Microsoft and Alphabet on October 28, Samsung's own full results at the end of the month. Until then, a 2.5% day is noise, in either direction.