South Korea's KOSPI closes at 6-month low as chipmakers slump on AI worries

Asian markets tumbled Thursday (Oct 15) as tech firms endured another significant decline, driven by a faster-than-anticipated surge in US consumer price inflation, which raised concerns about the Federal Reserve needing to raise interest rates more aggressively. Seoul and Tokyo were hardest hit, with traders abandoning once-stable chipmakers.

In Seoul, the KOSPI fell more than 7%, with SK hynix and Samsung losing over 10% each. Tokyo's Nikkei 225 dropped over 5%, while Kioxia and Advantest fell more than 11% and 13% respectively. SoftBank, a tech investment giant, also saw a drop of over 9%. Taipei's TSMC dropped around 3%. The sell-off followed tech firms' recovery from a summer slump fueled by worries about high valuations and the timing of returns on hefty investments.

Hong Kong, Shanghai, and Jakarta also recorded negative performances. In Singapore, the Straits Times Index fell 0.9%. The US CPI data, released showing a 3.7% increase in September, exceeded expectations and was largely attributed to energy cost surges due to the ongoing Iran war. This led to heightened expectations of future Federal Reserve interest rate hikes, potentially as early as this month.