Seoul shares sharply down late Thu. morning as U.S. midterm results spark AI woes

South Korean stocks experienced a significant decline late on Thursday as investors became apprehensive about the potential impact of the U.S. midterm elections on artificial intelligence (AI) policies. The benchmark Korea Composite Stock Price Index (KOSPI) fell 3.27 percent, or 185.77 points, to 5,498.03 by 11:20 a.m. The previous day's closing on Wall Street saw major stock indexes close higher, with investors pleased by the prospect of a Congress led by Democrats.

However, the election results cast uncertainty over the future regulations that the new House and Senate could impose on AI data centers. Semiconductors, being a crucial component of AI technology, were particularly hit. Samsung Electronics suffered a 5.05 percent loss, while SK hynix declined by 6.52 percent. Hanmi Semiconductor, a key chip equipment maker, plummeted 7.58 percent, and Samsung Electro-Mechanics, Samsung Electronics' electronic component affiliate, dropped 10.04 percent.

Other affected sectors included oil refineries and defense companies. SK Innovation, a leading oil refinery, fell 5.9 percent, and Hanwha Aerospace, a major defense contractor, dropped 4.76 percent. The Korean won weakened against the U.S. dollar to 1,342.15 won per dollar by 11:20 a.m., marking a 0.65 won decrease from the previous trading session's close.