TLDR
- South Korea’s KOSPI fell 7.57% to 5,554.22, its lowest close since April 7.
- Samsung Electronics fell 9.5% and SK Hynix dropped 11.1%.
- A circuit breaker halted trading for 20 minutes after the index fell as much as 9.29%.
- Sticky US inflation data raised bets on more rate hikes and added to AI spending worries.
- TSMC reports quarterly results Thursday, and investors expect profits to rise 60%.
South Korea’s KOSPI index closed at a six-month low on Thursday as chip stocks fell sharply. The index lost 454.59 points, or 7.57%, to end at 5,554.22.
It was the lowest close since April 7. It was also the seventh straight daily loss, the longest streak since September 2024.
Samsung Electronics fell 9.5% and SK Hynix dropped 11.1%. The two companies make up more than half of the South Korean market’s total value.
Circuit Breaker Halts Trading
During the session, the KOSPI fell as much as 9.29%. That triggered a circuit breaker, which halted trading for 20 minutes.
It was the first circuit breaker since July 29. It was the 10th this year and the 16th in the index’s history.
Market volatility rose to its highest level since late August. It had been calming since July after policy steps to curb leveraged single-stock funds.
Financial authorities held an emergency meeting to review market conditions. They said they would respond quickly to protect investors and keep the market stable.
Of 917 traded issues, 113 rose and 789 fell. Foreign investors sold a net 3.6 trillion won, or about $2.68 billion.
LG Energy Solution fell 4.6% and Hyundai Motor dropped 5.7%. The won traded at 1,344.6 per dollar.
Rate Worries and AI Debt Fears Hit Chips
The Philadelphia Semiconductor Index fell 4.3% overnight. Sticky US inflation data raised bets on more interest rate hikes.
Nvidia, Broadcom, AMD and Intel led chip stocks lower on Wall Street. Micron was also expected to open lower.
Earlier this week, memory chip stocks also fell on concerns about growing competition from China.
CoreWeave fell more than 15% after a chart of its bond yields spread on social media. The drop raised questions about the company’s heavy debt and rising interest costs.
Seo Sang-young of Mirae Asset Securities said the market is focused on whether capital raising can last. He said investors want to know if big infrastructure spending will turn into real income.
Mixo Das of J.P.Morgan said buyback programs at Samsung and SK Hynix have run their course, so the market is struggling to find a new buyer. He still expects AI stocks to be much higher in six to 12 months.
ASML warned on Wednesday it may not fully meet demand in 2027. TSMC reports quarterly results on Thursday, and investors expect profits to rise 60%.
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