(LEAD) Seoul shares tumble over 4 pct on tech losses amid lingering AI concerns

Seoul shares experienced a sharp decline of over 4 percent on Thursday, primarily driven by losses in tech shares and lingering doubts about the profitability of artificial intelligence (AI) investments. The Korea Composite Stock Price Index (KOSPI) dropped 4.58 percent, or 301.88 points, to close at 6,296.38, following a low of 6,238.32. This decline came after the index had previously risen by 1.62 percent and 3.76 percent on Tuesday and Wednesday, respectively.

The KOSPI's sell-off was further exacerbated by program trading being halted for five minutes at 10:18 a.m., temporarily disrupting trading activities. Throughout the day, trade volume was relatively light at 281.8 million shares, valued at 25.9 trillion won (US$18.2 billion). Foreign investors sold a net 3.33 trillion won worth of stocks, while institutions offloaded a net 121.8 billion won. Individuals, on the other hand, purchased a net 3.34 trillion won worth of shares.

According to Han Ji-young, an analyst at Kiwoom Securities, the KOSPI's momentum appeared to stall despite better geopolitical and macroeconomic conditions. She pointed out that investors were still seeking strong evidence of significant AI spending and growth, indicating that concerns over AI spending might have already peaked following recent earnings reports from major tech companies.

Semiconductor shares faced the steepest losses, with Samsung Electronics falling by 6.3 percent to 203,500 won and SK hynix dropping 10.37 percent to 1.5 million won. SK Square, the parent company of SK hynix, plummeted 13.32 percent to 970,000 won, while Samsung Electro-Mechanics, a subsidiary of Samsung Electronics, slid 9.37 percent to 1.23 million won.

Additionally, shipbuilding firms saw weakened performance, with HD Hyundai Heavy Industries falling 0.39 percent to 507,000 won and Hanwha Ocean declining 1.31 percent to 90,700 won. Major retailer Hyundai Department Store and leading brokerage Samsung Securities also experienced declines of 3.36 percent and 2.25 percent, respectively.

Despite these setbacks, defense company Hanwha Aerospace and pharmaceutical firm Samsung Biologics managed to post gains, with Hanwha Aerospace rising 4.67 percent to 1.05 million won and Samsung Biologics increasing by 1.54 percent to 1.51 million won. The Korean won closed at 1,423.8 won against the U.S. dollar, representing a 0.7 won increase from the previous day's closing rate.