South Korean stocks experienced a significant drop of more than 8% on Tuesday, driven by investor concerns leading to a sell-off in tech shares due to increased worries about artificial intelligence (AI) investment. The benchmark Korea Composite Stock Price Index (KOSPI) opened 5.26% lower and continued to decline, shedding 580.04 points, or 8.59%, reaching 6,175.71 by 11:20 am local time.
The Korea Exchange (KRX) activated a market-wide circuit breaker at 10:14 a.m. following the KOSPI’s plunge of over 8% from the previous session’s close, as reported by Yonhap news agency. Market sentiment was influenced by a sell-off on Wall Street, with concerns lingering among investors regarding the significant spending by tech giants on artificial intelligence (AI).
In Seoul, the majority of shares traded in negative territory, with key players such as Samsung Electronics dropping by 9.84% and SK hynix plummeting by 11.67%. Other notable declines included Samsung Electro-Mechanics, an affiliate of Samsung Electronics, which fell by 15.47%, and LG Electronics, which sank by 7.43%. Internet giant Naver saw a 4% decline, while leading mobile carrier SK Telecom nose-dived by 16.04%.
The Korean won was trading at 1,466.3 won against the U.S. dollar at 11:20 a.m., marking a decrease of 0.3 won from the previous day’s stock trading close. South Korea’s stock exchange operator activated a circuit breaker for the KOSPI due to the sell-off in tech shares, leading to a 20-minute trading halt for KOSPI-listed shares. This event marked the seventh time this year that the KRX has implemented a circuit breaker.
