(2nd LD) Seoul shares crash over 7 pct on chip rout amid AI, inflation woes
SEOUL, Oct. 15 (Yonhap) -- South Korean stocks plunged more than 7 percent Thurs...
South Korean stocks plummeted over 7 percent on Thursday, with major chipmakers leading the decline as worries mounted about the lasting viability of artificial intelligence (AI) investments and the Federal Reserve's rate hikes. The benchmark Korea Composite Stock Price Index (KOSPI) fell 7.57 percent, reaching a low of 5,554.22, marking its longest losing streak since September 2024.
The KOSPI had already dropped 5.59 percent at market open, marking its seventh consecutive day of losses. The Korea Exchange (KRX) temporarily suspended program selling to stabilize the market, and later implemented a circuit breaker after the KOSPI index fell more than 8 percent from the previous day's close.
The U.S. stock market ended lower on Thursday, with renewed doubts about the sustainability of AI-related spending and unexpectedly high September inflation data weighing on investor confidence. The U.S. Consumer Price Index (CPI) rose 0.6 percent in September, the fastest monthly increase since April, raising concerns that persistent inflation could prompt the Federal Reserve to raise interest rates.
Trading volume on the KOSPI was moderate at 363.47 million shares valued at 26.87 trillion won (US$19.97 billion). Foreign investors sold a net of 3.62 trillion won, while institutions and individual investors collectively bought 1.69 trillion won and 1.29 trillion won, respectively.
Analyst Lee Kyoung-min of Daishin Securities noted that the KOSPI market faced significant selling pressure due to concerns over the sustainability of AI-related investments, intensifying competition in memory chip production, and rising borrowing costs. Semiconductor shares suffered, while IT hardware and power equipment stocks also declined, as investor sentiment towards the broader AI value chain weakened.
Market leaders, including Samsung Electronics, SK hynix, and SK Square, all experienced sharp declines. The Korean won weakened against the U.S. dollar, closing at 1,344.6 won, a 2.3 won decrease from the previous trading session. Bond prices, inversely related to yields, increased, with the three-year Treasury yield falling 1.6 basis points to 3.867 percent, and the five-year government bond return dropping 4 basis points to 4.007 percent.
Written by urgent.news from Yonhap News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
