(URGENT) Seoul stocks crash for 2nd day on AI rout after U.S. midterms

Seoul stocks experienced a second consecutive day of decline on Friday, as fears surrounding a potential Democratic Congress slowing down the construction of AI data centers weighed on the market. The Korean won weakened against the U.S. dollar. The KOSPI index fell by 6.02%, closing at 5,059.69 points, a drop of 324.11 points. On Thursday, the index had plummeted over 5%.

Trading was halted for 20 minutes following a sharp drop at the opening bell. A total of 297 million shares, worth 27.5 trillion won, were traded. Losers outnumbered winners by a ratio of 757 to 131. Foreign investors sold a combined 2.77 trillion won worth of stocks, while domestic investors bought a combined 2.3 trillion won. Analyst Lee Kyoung-min noted that the drop affected the entire AI value chain, including semiconductors.

Democrats gained control of both houses of Congress in the recent midterm elections, particularly in five states known for AI data center development. However, Lee believed that the market's reaction was exaggerated, as the possibility of completely halting data center construction was low. Many major companies saw their stocks decline, including Samsung Electronics, SK hynix, Hyundai Motor, Hanwha Aerospace, and KB Financial.

Among the few gainers were Naver and Samsung SDS. The won weakened to 1,356.6 against the U.S. dollar, down 14.5 won from the previous session. Bond prices, which move inversely to yields, rose, with three-year Treasurys falling by 5.6 basis points to 3.613% and five-year government bonds dropping 5.2 basis points to 3.717%.