Market Overview

The Kospi opened by plummeting below the 5,000 mark for the first time in nearly ten months, largely due to a bearish trend in major semiconductor stocks. This selloff led to the Kospi falling to 4,923.47, down 460.33 points, equivalent to an 8.55% decrease from the previous trading day.

The Korea Exchange activated a circuit breaker at 9:03:33 a.m. in response to this sharp decline, which halts trading for 20 minutes when a stock index drops more than 8% from the previous close for at least one minute.

Impact on Major Stocks

Key players in the semiconductor industry saw substantial losses during this downturn. Notably, Samsung Electronics experienced a decline of 9.98%, settling at 181,400 won, while SK Hynix fell by 11.79%, priced at 1,115,000 won. This coordinated drop in substantial tech stocks widened the Kospi’s losses significantly.

Underlying Factors for the Decline

Investor sentiment surrounding semiconductor shares has soured due to rising concerns about regulatory actions regarding data centers in the United States. Following the recent U.S. midterm elections, where the Democratic party gained control over both the Senate and the House, there are fears of increased scrutiny on data-center investments and the broader artificial intelligence (AI) industry.

Additionally, speculation over whether significant investments in AI will yield adequate returns further dampened interest in chip stocks. Concurrently, U.S. markets experienced a selloff of AI-related technology shares, with all three major indexes undergoing losses, overshadowing any prior optimism related to election outcomes.