- South Korea's benchmark index, the KOSPI, extended its steep losses, falling more than 8% and triggering a market-wide circuit breaker for a second consecutive session.
- Trading on the KOSPI was halted for 20 minutes after the Korea Exchange activated the circuit breaker at an 8% drop, following Tuesday's nearly 11% plunge.
- The KOSPI slumped 12.3% to 5,283.12 points by 04:23 GMT, reaching its lowest since early April.
- The decline was led by heavyweight chipmakers SK Hynix Inc and Samsung Electronics, with SK Hynix shares plunging more than 16%.
- Asian stocks fell on Wednesday, led by steep losses in South Korea, as a brutal selloff in technology shares extended for a second straight session ahead of key U.S. earnings and the Federal Reserve’s policy decision later in the day.
- The benchmark has now fallen roughly 34% from its recent peak, prompting renewed debate over whether the correction could begin tightening domestic financial conditions enough to influence monetary policy, according to Nomura analysts.
South Korea's KOSPI index experienced a dramatic decline, falling 12.3% to 5,283.12 points, its lowest level since early April. This plunge follows a historic rout on Tuesday, where the index dropped nearly 11%, prompting a market-wide circuit breaker activation for the second consecutive day.13
The selloff was primarily driven by concerns surrounding artificial intelligence spending, particularly affecting semiconductor stocks. Heavyweight chipmakers like SK Hynix and Samsung Electronics led the decline, with SK Hynix shares plummeting over 16%. Despite reporting record quarterly earnings, the company failed to alleviate investor fears regarding high valuations and the sustainability of AI-driven demand.45
Analysts from Nomura noted that the KOSPI has now fallen approximately 34% from its recent peak, raising questions about whether this correction could tighten domestic financial conditions enough to impact monetary policy. The ongoing tech selloff reflects broader market anxieties ahead of key U.S. earnings reports and the Federal Reserve's policy decisions, contributing to the volatility in Asian markets.
“The KOSPI's decline has now reached roughly 34% from its recent peak, raising concerns about potential impacts on domestic financial conditions and monetary policy, according to Nomura analysts. Additionally, trading was halted for 20 minutes after the Korea Exchange activated a circuit breaker due to the steep losses.”
