South Korea's KOSPI triggers circuit breaker in tech-led selloff

South Korea's KOSPI index plummeted by 8% on Thursday, activating a circuit breaker for the first time in 2-1/2 months, following a technology-driven sell-off on Wall Street. The index, down 480.76 points to 5,528.05, hit its lowest since July 29 due to sticky US inflation data spurring speculation of additional rate hikes. This marks the 10th activation of the circuit breaker this year and the 16th overall.

Volatility had stabilized after authorities tightened regulations in July to counter a retail boom in leveraged single-stock ETFs introduced in May. Analysts noted the market's sensitivity to capital raising sustainability and the impact of massive infrastructure investment on AI services' revenue growth. Chipmakers Samsung Electronics and SK Hynix saw sharp declines of 9.70% and 11.35% respectively, as the Philadelphia Semiconductor Index fell 4.3% overnight amid inflation concerns and expectations of further US rate hikes, hurting AI-linked stocks.

Most other index constituents also fell, with only 52 shares advancing while 855 declined. Foreign investors were net sellers of shares worth 2.9 trillion won. The KOSPI has risen 31% this year but remains 39% below its late June record high. The won weakened to 1,348.2 per dollar, and government bond yields decreased.