Seoul:Seoul stocks experienced significant declines late Friday morning amid concerns over the potential impact of the Democratic Party's victory in the U.S. midterm elections on data center construction.
According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) dropped 240.41 points, or 4.47 percent, to 5,143.39 by 1120 a.m. The Korea Exchange (KRX) halted KOSPI trading for 20 minutes shortly after the market opened due to an 8 percent plunge in the index.
The sell-off was influenced by the overnight decline of major indexes on Wall Street, where investors offloaded shares in top-cap companies within the artificial intelligence and data center sectors following the election results. The S&P 500 and the tech-heavy Nasdaq fell over 4 percent and 5 percent, respectively.
Han Ji-young, an analyst at Kiwoom Securities, noted that Texas accounts for a significant portion of U.S. data center construction, and restrictions in this area could lead to broader negative effects. In Seoul, shares of major companies also fell, with Samsung Electronics and SK hynix dropping over 3 percent and 6 percent, respectively. Hyundai Motor's shares decreased by 4.6 percent, Hanwha Aerospace by 4.41 percent, and LG Energy Solution by 0.14 percent.
Additionally, the Korean won was trading at 1,356.2 won against the U.S. dollar, representing a decline of 0.7 won from the previous session's close.