Telecom, K-Content Indexes Gain 9% as KOSPI Sinks 10%

While South Korea's KOSPI index fell 10.43% and the KOSDAQ dropped 8.54% over three trading days, the KRX Broadcasting & Telecommunications index rose 9.25% and the KRX K-Content index gained 9.29%. This market divergence followed the U.S. midterm elections, with analysts pointing to a shift towards sectors perceived as less vulnerable to U.S. policy changes and economic fluctuations.

Telecom shares, including LG Uplus, KT, and SK Telecom, were reportedly sought as defensive holdings due to their stable demand and dividend yields during a broader market selloff. This investor behavior suggests a preference for assets offering consistent returns amidst uncertainty stemming from external political events, particularly as the KOSPI experienced a 6.02% plunge in a single session.

Conversely, the KRX Semiconductor index fell 17.32%, with Samsung Electronics and SK hynix experiencing significant declines. This downturn was linked to investor concerns that potential U.S. policy changes, following the Democratic Party gaining control of both chambers of Congress, could delay data center construction and soften chip demand, including for artificial intelligence investments. Securities analysts, such as Han Ji-young of Kiwoom Securities, anticipate continued high volatility in the chip sector.