South Korea’s stock market faced a sharp decline, leading to the activation of a circuit breaker by the Korea Exchange for the benchmark Korea Composite Stock Price Index (KOSPI). Trading of KOSPI-listed shares was paused for 20 minutes after the index dropped over 8 percent from the previous session’s close. This marked the fifth instance this year that the circuit breaker was implemented.
Investors witnessed heavy selling pressure as large-cap technology stocks were offloaded for profit-taking, contributing to the market turmoil. The selling spree by foreign and institutional investors intensified the losses, following a significant spike in stock prices the day before. Tech shares, particularly semiconductor stocks, experienced notable declines, with Samsung Electronics and SK hynix witnessing significant drops.
The market downturn was also influenced by concerns over artificial intelligence (AI) investments, with investors opting to cash in on the previous session’s gains. Major companies like Hanmi Semiconductor, SK Square, Hanwha Ocean, and Celltrion saw their stock prices plummet. Additionally, the Korean won depreciated against the U.S. dollar, trading at 1,548.75 won at 11:20 a.m., reflecting a decline from the previous session.
Wall Street’s performance was volatile, with tech giants closing in the negative territory, further fueling apprehensions about AI infrastructure investments. The latest data revealing a 4.1 percent rise in U.S. consumer prices in May, surpassing the Federal Reserve’s 2 percent target, added to speculations about potential changes in the central bank’s monetary policies to address inflationary pressures.
