Seoul:South Korean stocks saw a significant decline, plunging more than 7 percent on Thursday as major chipmakers faced losses amid increasing concerns about the sustainability of artificial intelligence (AI)-related investments and potential interest rate hikes by the Federal Reserve. The Korean won also weakened against the U.S. dollar.
According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) opened 5.59 percent lower and continued to fall, tumbling 454.59 points, or 7.57 percent, to close at 5,554.22. The index reached a low of 5,450.81 during the session. This marked the seventh consecutive session of losses for the KOSPI, its longest losing streak since September 2024.
The sharp decline triggered the Korea Exchange (KRX) to utilize a sell-side sidecar shortly after the market opened, suspending program selling for five minutes as KOSPI 200 futures dropped more than 5 percent for at least one minute. As the market continued to decline, a circuit breaker was activated at 1238 p.m., halting trading on the main bourse for 20 minutes after the KOSPI fell over 8 percent from the previous session's close.
In the United States, stocks closed lower overnight, with investor sentiment dampened by renewed concerns over AI-related spending and a hotter-than-expected September inflation report. The U.S. Consumer Price Index rose 0.6 percent in September, marking its fastest monthly increase since April, raising fears that persistent inflation might lead the Federal Reserve to increase interest rates.