Seoul stocks open sharply lower after US tech sell-off

Seoul's stock market experienced a sharp decline on Monday, following a sell-off in the technology sector on Wall Street, due to mounting concerns about the profitability of investments in artificial intelligence (AI) infrastructure. The Korea Composite Stock Price Index (KOSPI) opened 3.17 percent lower and subsequently fell by 95.95 points, or 1.69 percent, to reach 5,572.10 at 9:15 a.m. Despite its initial drop, the KOSPI managed to recover, closing 1.69 percent lower at 5,668.05 on Friday, ending a seven-day losing streak that saw a 6.3 percent decrease.

The downturn on Wall Street mirrored a similar pattern in the United States, with the Dow Jones Industrial Average slipping by 0.34 percent, while the tech-focused Nasdaq Composite plummeted 2.14 percent. Investors are exercising caution as major companies, such as Tesla and Meta Platforms, are scheduled to release earnings reports this week, alongside the upcoming U.S. midterm elections on November 3rd. Analysts attribute the current market volatility to ongoing uncertainty regarding interest rate expectations.

In Seoul, the technology sector bore the brunt of the decline, with Samsung Electronics suffering a 1.28 percent drop and its chip manufacturing rival, SK hynix, falling by 2.83 percent. The car manufacturer Hyundai Motor also contributed to the downward trend.