Seoul: South Korean stocks were trading lower late Thursday morning amid continuing volatility surrounding major technology shares and concerns over escalating tensions between the United States and Iran. After choppy trading, the benchmark Korea Composite Stock Price Index (KOSPI) had fallen 124.91 points, or 1.62 percent, to 7,605.91 as of 11:20 a.m. The index had started nearly 3 percent lower.
According to Yonhap News Agency, the overnight performance of U.S. stocks contributed to the decline. The Dow Jones Industrial Average closed 1.87 percent lower, the S and P 500 fell 1.62 percent, and the tech-heavy Nasdaq composite shed 1.98 percent, as investors unloaded tech shares amid concerns over the high valuation of artificial intelligence (AI) stocks. AI chip giant Nvidia dipped 3.73 percent, Broadcom slid 5.12 percent, Super Micro Computer tumbled 28 percent, and AMD dropped 4.86 percent.
Market sentiment was also weighed down by news that the U.S. launched additional strikes against Iran. In response, Iran threatened to fire on any vessel attempting to pass through the Strait of Hormuz, raising concerns that the two countries may reenter a full-scale war.
The U.S. Consumer Price Index for May, key inflation data that drew investors' attention, was softer than expected, but was not enough to soothe concerns over a possible hawkish policy pivot by the U.S. Federal Reserve, said Seo Sang-young, an analyst at Mirae Asset Securities.