South Korean Stocks Plunge as AI Spending Concerns Hit Tech
The KOSPI index fell 3.59 percent on Tuesday as investors sold off semiconductor stocks amid concerns over artificial intelligence infrastructure profitability.
The Korea Composite Stock Price Index (KOSPI) closed down 3.59 percent at 5,648.79 on Tuesday, driven by a heavy sell-off in the technology sector. Investors expressed growing concern regarding the productivity and profitability of massive capital expenditures on artificial intelligence infrastructure.
Semiconductor leaders Samsung Electronics and SK hynix led the decline, falling 4.15 percent and 5.03 percent respectively. The downturn extended to other sectors, with steel giant POSCO Co., Ltd. slumping 5.3 percent and oil refiners SK Innovation and S-Oil dropping following a sharp decrease in crude prices. SK Innovation shares plunged up to 9.36 percent, while SK Square, the parent company of SK hynix, sank 5.37 percent.
Market sentiment was further pressured by overnight losses in the U.S. Nasdaq Composite and S&P 500, alongside investor caution leading up to the U.S. midterm elections. While foreign and institutional investors were net sellers, individual investors acted as net buyers. The Korean won closed higher against the U.S. dollar at 1,341 won.
