(URGENT) Seoul stocks open sharply lower on AI fears after U.S. midterms

Seoul stocks experienced a sharp decline on Friday, mirroring a decline on Wall Street after the U.S. midterm elections. The Korea Composite Stock Price Index (KOSPI) fell by 8.55 percent to 4,923.47, marking a decrease of 460.33 points from the previous trading session. In response to the heavy selling pressure, the bourse operator issued a circuit breaker, halting trading for 20 minutes.

The main U.S. stock indexes, including the S&P 500 and Nasdaq, also saw significant drops, with the former falling by 4.36 percent and the latter by 5.52 percent. This decline was largely attributed to concerns over a potential Democratic sweep in Congress, which could potentially slow down investments in data centers and related sectors, particularly those involved in artificial intelligence (AI).

The fear of a slowdown in AI-related investments was further exacerbated by an increase in oil prices following reports that Iranian forces had damaged at least five tankers in the Strait of Hormuz. In response to these developments, several key South Korean companies saw their stocks plunge. Samsung Electronics and SK hynix each dropped by 9.98 percent and 11.63 percent, respectively.

Hyundai Motor, a major car manufacturer, retreated by 6.47 percent, while KB Financial, a financial firm, saw a decline of 5.03 percent. Hanwha Aerospace, a defense company, also experienced a 4.56 percent drop. The Korean won traded at 1,357.4 against the U.S. dollar, a decrease of 1.9 won from the previous trading session's close.