South Koreas KOSPI fell below 5,000 on Friday for the first time since February. An 8% slide after the open triggered a circuit breaker, halting trading for 20 minutes.
SK Hynix shareholders absorbed one of the sharpest losses. The stock sank 11.71% to 1,116,000 won, even though the chipmaker reported record quarterly sales last week.
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KOSPI Index Performance. Source: Google FinanceHow Wall Streets AI Sell-Off Crossed the Pacific
The losses began in New York. The S&P 500 fell 4.36% on Thursday, while the Nasdaq dropped 5.52%. Chip stocks fared worse, as the Philadelphia Semiconductor Index sank 12.25%, its steepest drop since March 2020.
BeInCrypto reported three pressures behind that rout:
- Incoming governors in Texas, Georgia, and Ohio pledged to pause or restrict new data centers.
- Qualcomm reported a 26% drop in phone chip sales, missing analyst estimates.
- Doubts over AI spending were already building before the week began.
Koreas chipmakers sit close to all three pressures. SK Hynix is a major supplier of high-bandwidth memory (HBM) used in AI accelerators.
Samsung Electronics stock also fell 9.98% to 181,400 won in early trade. Together, the two memory makers account for roughly half of the indexs market cap.
The damage in Seoul started a day earlier. The KOSPI lost 5.28% on Thursday as foreign investors sold more than 3.4 trillion won of shares.
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What the KOSPI Circuit Breaker Says About Koreas Chip Bet
The Korea Exchange triggered the halt at 9:03 a.m., three minutes into the session. A Stage 1 circuit breaker pauses all trading once the index falls 8% or more from the previous close for one minute.
Fridays stop was the 11th of its kind this year. The previous one came on October 15, after hotter US inflation data.
Meanwhile, the tech-heavy KOSDAQ tripped a sell-side sidecar at 9:06 a.m. That mechanism pauses automated program orders for five minutes.
Japans Nikkei 225 took a smaller hit, falling 5.69% to 57,605.59 by 9:36 a.m. Tokyo time.
Seoul also fell harder than the Nikkei on October 30, when an Alphabet spending scare hit chipmakers. The repeat suggests Koreas chip-heavy index magnifies each US tech shock.
Koreas market has now halted twice in under a month on US news, first inflation data and now an election. Until US governors and Congress clarify data center rules, policy headlines may steer the KOSPI as much as earnings.
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