TLDR
- South Korea’s KOSPI index fell 7.57% to 5,554.22, its lowest close since April 7.
- Samsung Electronics dropped 9.5% and SK Hynix lost 11.1%.
- A circuit breaker paused trading for 20 minutes after the index fell as much as 9.29%.
- Sticky US inflation data raised rate hike bets and added to doubts about AI spending.
- TSMC reports quarterly results on Thursday, with investors expecting profits to rise 60%.
South Korea’s main stock index fell sharply on Thursday as chip stocks sold off. The KOSPI closed down 7.57% at 5,554.22.
That was its lowest finish since April 7. It was also the seventh straight day of losses, the longest run since September 2024.
Samsung Electronics shares dropped 9.5%, and SK Hynix lost 11.1%. Together, the two chipmakers make up more than half of the country’s stock market value.
Trading Halted for 20 Minutes
The index fell as much as 9.29% during the session. That set off a circuit breaker that paused trading for 20 minutes.
It was the first circuit breaker since July 29. It was the 10th this year and the 16th in the index’s history.
Market volatility jumped to its highest level since late August. It had been easing since July after steps to limit a boom in leveraged single-stock funds.
Financial authorities held an emergency meeting on market conditions. They promised a quick response to protect investors and keep the market steady.
Of 917 stocks traded, 789 fell and 113 rose. Foreign investors sold a net 3.6 trillion won, or about $2.68 billion.
LG Energy Solution fell 4.6%, and Hyundai Motor dropped 5.7%. The won traded at 1,344.6 per dollar.
Inflation Data and AI Debt Worries
The Philadelphia Semiconductor Index fell 4.3% overnight. Sticky US inflation data raised bets that interest rates will go up again.
Nvidia, Broadcom, AMD and Intel led chip stocks lower on Wall Street. Micron was set to open lower as well.
Memory chip stocks had also dropped earlier this week on worries about stronger competition from China. CoreWeave fell more than 15% after a chart of its bond yields spread online.
Seo Sang-young of Mirae Asset Securities said investors are asking if raising capital can last. They also want to know if heavy spending on AI infrastructure will turn into real income.
Mixo Das of J.P.Morgan said Samsung and SK Hynix have finished their buyback programs, so the market lacks a new buyer. He still expects AI stocks to be much higher in six to 12 months.
ASML said on Wednesday it may not be able to fully meet demand in 2027. The chip equipment maker’s warning adds to the focus on supply.
TSMC reports quarterly results on Thursday. Investors expect profits to rise 60%.
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