South Korea's KOSPI sinks below 5,000 as AI shares slide
Trading in Seoul was halted for 20 minutes after the index fell more than 8 percent, following a tech sell-off on Wall Street.
South Korea's benchmark KOSPI fell more than 8 percent on Friday and dropped below 5,000 points, after a sell-off in technology shares on Wall Street that Yonhap linked to the outcome of the United States midterm elections.
Trading was halted for 20 minutes, the first such stop in 16 sessions. Samsung Electronics and SK hynix, which together account for close to half of the index's market value, both fell more than 10 percent in morning trade.
The move followed losses overnight in New York. Democrats won majorities in both the Senate and the House of Representatives, and took the governorship of Texas, a state Yonhap describes as central to the building of data centres for artificial intelligence. The tech-heavy NASDAQ fell more than 5 percent.
Analysts cited by Yonhap said a Democrat-controlled Congress could slow the pace of AI data-centre construction, and that President Donald Trump's power would be reduced over the last two years of his term.
Investor nervousness showed in the VKOSPI, the volatility index for the KOSPI 200, which rose to a three-month high of 64.74, according to the Korea Exchange.
Han Ji-young, an analyst at Kiwoom Securities, said swings on the local market were likely to continue after the sharp drop.
Daishin Securities took a different view in a research note, calling the reaction to the AI-driven rout excessive. Lee Kyung-min, an analyst at the brokerage, said the Democratic win may have caused delays in data-centre construction, but that a full suspension of the build-out was unlikely.
Finance Minister Lee Hyoung-il met relevant ministers earlier in the day and said the government "will preemptively set up measures and take them to prevent our stock markets from excessively responding" to the US tech sell-off. Lee said Seoul would keep watching external risks and that the country's economic fundamentals remain solid. He also pointed to forecasts from some experts that global investment in AI may continue.
Two other outlets carrying the story, Yahoo Finance Singapore and Investing.com, headlined the session as a regional event, saying the AI rout battered stocks in Japan as well as South Korea.
South Korean markets are dominated by chipmakers whose orders are tied to the build-out of data centres abroad, which makes Seoul one of the first places to feel a shift in US technology policy.
How the reports differ
Yonhap built its report around the American election result, tying the KOSPI's 8 percent fall and 20-minute trading halt to Democratic wins in Congress and the Texas governorship, and it was alone in naming Samsung Electronics, SK hynix, the 64.74 VKOSPI reading and Finance Minister Lee Hyoung-il's comments. Yahoo Finance Singapore and Investing.com ran the same headline, framing the day as a regional sell-off that hit Japan as well as South Korea, a country Yonhap's report did not mention. Neither of those two published index levels or percentage moves in what it carried.
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