Seoul shares dip over 5 pct on tech sell-off on renewed AI, inflation woes

Seoul shares plummeted over 5 percent on Tuesday, marking their fifth consecutive day of losses as technology stocks suffered due to concerns over artificial intelligence (AI) sector issues and rising inflation. The Korean currency weakened against the US dollar. The Korea Composite Stock Price Index (KOSPI) began the day 3.1 percent lower, losing 348.89 points or 5.46 percent to reach 6,035.35.

Foreign investors exited the market, selling stocks worth a net 4.51 trillion won (US$3.35 billion), while domestic investors and institutions bought stocks for a combined net of 4.22 trillion won. The Korea Exchange ignited a sell-side sidecar during the morning session when the KOSPI fell by more than 5 percent for over a minute.

Trading volume was moderate, with 399.87 million shares traded worth 26.79 trillion won, with the number of declining stocks significantly higher than the number of advancing ones. The previous night, US stocks ended the day mixed, with the Dow Jones Industrial Average up 0.38 percent and the tech-focused Nasdaq composite down 0.44 percent.

Chipmakers experienced a sharp decline after reports highlighted rapid technological advancements by their Chinese competitor, ChangXin Memory Technologies (CXMT). Investors now await the US consumer price index (CPI) report scheduled for Wednesday (US time) to gain insights into the Federal Reserve's policy outlook before their October rate-setting meeting.