South Korea's Kospi falls below 5,000 mark amid global AI sell-off
The benchmark index plunged over 8 per cent on Friday, triggering a circuit breaker as semiconductor stocks faced heavy selling pressure.
South Korea's benchmark Kospi index plunged 8.5 per cent in early trading on Friday, November 6, falling below the 5,000 mark. According to reports from Mint, the decline triggered a 20-minute trading suspension on the Korea Exchange after the index hit its first 8 per cent circuit breaker shortly after the market opened.
The sell-off follows a global market rout on Thursday, where the Nasdaq 100 fell 6.4 per cent and wiped out $2.3 trillion in market capitalisation. Investors are reportedly exiting artificial intelligence (AI) related trades following the US midterm elections, amid concerns that a Democratic sweep of the US Congress could lead to tighter regulations and a slowdown in AI infrastructure spending.
South Korean semiconductor giants Samsung Electronics and SK Hynix both plunged more than 11 per cent in early Friday trade. The heavy dependence of the South Korean market on these two chipmakers has made the country's equities particularly vulnerable to the global AI-related sell-off.
The decline in the Kospi comes after the index surged past 9,000 during the summer, driven by the AI boom. The current slump has left the index approximately 46 per cent below its June record high.
Kim Dojoon, CEO of Zian Investment Management, stated that the market has reached a
