KOSPI Index Plummets as AI Spending Fears Trigger Tech Sell-off

The South Korean stock market experienced extreme volatility as the KOSPI index reversed a strong two-session rally to close sharply lower on Thursday. On Wednesday, the index had gained 3.76 percent, closing at 6,598.26 behind surges in automobile and technology stocks. However, this momentum collapsed the following day, with the KOSPI falling 4.58 percent, or 301.88 points, to close at 6,296.38.

The downturn was triggered by a sell-off of Nasdaq-listed tech shares and growing investor skepticism regarding artificial intelligence spending. This sentiment followed the first public quarterly results from Space Exploration Technologies Corp., which reported an unwelcome spike in capital expenditure. The NASDAQ subsequently fell 0.83 percent, fueling global profit-taking.

Semiconductor giants led the losses in Seoul, with SK Hynix sliding 10.37% and Samsung Electronics dropping 6.3%. The volatility was severe enough that program selling was halted at 10:18 a.m. after the KOSPI 200 Futures index dropped 5.04%. Additionally, the tech-heavy KOSDAQ decreased by 0.26% to close at 801.67, while the South Korean won weakened to 1,423.8 won per dollar.