Seoul Shares Plunge 7.57% as Chip Rout Deepens on AI and Rate Fears
South Korea's KOSPI closed down 7.57 percent at 5,554.22 on Oct. 15, its seventh straight decline, as Samsung Electronics and SK hynix led a chip sell-off driven by doubts over AI spending and U.S. rate concerns.
The benchmark Korea Composite Stock Price Index fell 454.59 points, or 7.57 percent, to close at 5,554.22, after touching an intraday low of 5,450.81. The index opened 5.59 percent lower and declined for a seventh consecutive session, its longest losing streak since September 2024, the report said. The closing level was the lowest since April 7, when the index slipped below 5,500.
The slide set off two market-wide mechanisms. The Korea Exchange activated a sell-side sidecar shortly after the opening, suspending program selling for five minutes after KOSPI 200 futures fell more than 5 percent for at least one minute. At 12:38 p.m., the exchange activated a circuit breaker that halted trading on the main bourse for 20 minutes as the index dropped more than 8 percent from the previous session's close.
The sell-off followed a lower close on Wall Street, where renewed doubts about the durability of AI-related spending and a hotter-than-expected September U.S. inflation reading weighed on sentiment. The U.S. Consumer Price Index rose 0.6 percent month on month in September, its fastest monthly gain since April, adding to expectations that persistent inflation could push the Federal Reserve to raise interest rates.
Trade volume was moderate at 363.47 million shares worth 26.87 trillion won, or about US$19.97 billion. Decliners outnumbered advancers 787 to 112. Foreign investors sold a net 3.62 trillion won, while institutions and individuals bought a net 1.69 trillion won and 1.29 trillion won, respectively.
Lee Kyoung-min, an analyst at Daishin Securities, said the KOSPI market came under heavy selling pressure amid concerns over the sustainability of AI-related investments, intensifying competition in memory chip production and rising borrowing costs. Semiconductor shares slumped, and IT hardware and power equipment stocks also declined as investor sentiment toward the broader AI value chain weakened, he said.
Market heavyweights fell across the board. Samsung Electronics dropped 9.48 percent to 210,000 won, and SK hynix fell 11.06 percent to 1.26 million won. SK Square, the parent company of SK hynix, lost 10.21 percent to 765,000 won, while Samsung Electro-Mechanics sank 15.36 percent to 1.16 million won.
The won weakened against the U.S. dollar, quoted at 1,344.6 per dollar as of 3:30 p.m., down 2.3 won from the previous stock trading session's close. Bond prices, which move inversely to yields, closed higher: the yield on three-year Treasurys shed 1.6 basis points to 3.867 percent, and the return on benchmark five-year government bonds lost 4 basis points to 4.007 percent.