South Korea’s benchmark KOSPI index plunged 7.6 per cent on Thursday, according to market reports, triggering emergency trading halts on both of Seoul’s stock exchanges as a global semiconductor sell-off deepened.
The index closed at 5,554.22, its steepest one-day decline since late July and its lowest close since April. At its worst point during the session it had fallen more than 9 per cent. The junior KOSDAQ market tumbled 7.7 per cent to 760.82. Trading was suspended for 20 minutes on both exchanges after each index fell 8 per cent — the first time both markets have triggered circuit breakers on the same day since July. Korean media dubbed the session “Black Thursday”, reports said.
Chip giants lead the rout
The losses were concentrated in South Korea’s two largest chipmakers. Samsung Electronics fell 9.5 per cent while SK Hynix dropped 11.1 per cent, as investors reassessed the profitability of massive artificial intelligence infrastructure spending amid rising borrowing costs.
Foreign investors sold 3.63 trillion won (about $2.7 billion) worth of KOSPI shares, extending their selling streak to an eighth consecutive session. The index has now fallen for seven straight trading days, shedding roughly 21 per cent over the period.
The sell-off is the second shock to risk assets this week, after drone strikes sank two ships in the Black Sea, rattling insurers and shippers.
Hot US inflation fans AI doubts
The immediate trigger was American data: US consumer prices rose 3.7 per cent year-on-year in September, above the 3.6 per cent forecast, while core inflation came in at 2.6 per cent, also above expectations. The figures revived fears that the Federal Reserve could raise interest rates again, lifting financing costs for the technology companies investing heavily in AI infrastructure.
Analysts said the episode exposes a widening split in global markets. The same AI optimism that carried the KOSPI to a record above 9,000 in June is now being tested by doubts over whether the spending will ever pay off. SK Hynix now sits more than 50 per cent below its June peak.
The rout spread across Asia, with Japan’s Nikkei falling nearly 5 per cent and chip shares dropping in Taiwan and Hong Kong. The strain lands as the United States faces mounting international scrutiny on several fronts, from sanctions on the International Criminal Court.
Some analysts remain hopeful. Dan Ives of US investment firm Yorkville Ives told a briefing in Seoul this week that he expects the KOSPI could recover to 9,000 within the next six to 12 months, as global investors rediscover the value in Korean technology shares.
