Seoul shares open lower on Democratic Party victory in US midterm elections

Korean stocks opened lower Thursday following the U.S. midterm elections, which saw the Democratic Party secure a victory. This outcome has raised concerns about potential stricter regulations on artificial intelligence (AI) in the United States. The Korea Composite Stock Price Index (KOSPI), a key benchmark, dropped 1.98% to 5,570.99 as early trading commenced.

Despite the negative start to the day, U.S. stocks experienced a rebound by the close of the market session. The Dow Jones Industrial Average climbed 3%, while the S&P 500 increased by 1.6%. The tech-focused Nasdaq Composite also showed a positive trend, gaining 1.4%.

However, anxieties surrounding the potential for more stringent AI regulations under the new Democratic-led Congress weighed heavily on investors. This sentiment was particularly evident in the performance of semiconductor shares. Samsung Electronics and SK hynix, two major players in the industry, both saw their stocks decline significantly.

Samsung Electronics fell by 3.56%, while SK hynix experienced an even sharper drop of 5.8%. Leading chip equipment maker Hanmi Semiconductor and SK Square, the parent company of SK hynix, also suffered losses, with shares plummeting by 6.39% and 5.12%, respectively.

The impact of these events extended to the broader market. Oil refiners, including SK Innovation and S-Oil, experienced declines as well, with SK Innovation dropping 4.2% and S-Oil falling 2.34%. The Korean won traded at 1,340.25 won per U.S. dollar as of 9:15 a.m.