KOSPI crashes over 8 pct on tech hemorrhage, U.S. rate woes; won rises after verbal intervention - UPI.com

South Korean Stocks Decline More Than 8 Percent; KOSPI Falls to 7,484.41 as Semiconductor Shares Lead Losses

SEOUL — South Korean stocks declined more than 8 percent on Monday, marking the third consecutive session of losses, as investors sold shares in major technology companies amid concerns about artificial intelligence profitability and the possibility of a U.S. Federal Reserve interest rate increase.

The benchmark Korea Composite Stock Price Index (KOSPI) fell 676.18 points, or 8.29 percent, to close at 7,484.41 after reaching an intraday low of 7,442.73. The KOSDAQ index declined more than 9 percent to finish at 911.39. Trading volume on the KOSPI reached 448.3 million shares valued at 47.8 trillion won (US$31.2 billion), with 873 stocks declining and 42 advancing. Foreign investors sold 355.5 billion won of local shares and domestic institutions sold 1.6 trillion won, while individual investors purchased 1.76 trillion won.

The Korea Exchange activated a circuit breaker on the KOSPI approximately three minutes after the market opened, halting trading for 20 minutes, and applied a sell-side sidecar mechanism around 9:34 a.m. A sell-side sidecar was also triggered on the KOSDAQ market six minutes after opening, suspending trading for five minutes, followed later by a circuit breaker after the index fell more than 8 percent.

The decline followed sharp losses on U.S. markets the previous week. The Dow Jones Industrial Average closed 1.35 percent lower on Friday, the S&P 500 fell 2.64 percent, and the Nasdaq Composite dropped 4.18 percent. Major U.S. semiconductor companies recorded losses, including Nvidia down 6.2 percent, Broadcom down 7.92 percent, and Micron down 13.25 percent.

A report from Samsung Securities stated that the pullback appeared driven by profit-taking focused on the semiconductor sector rather than changes in market fundamentals, noting that the market had reacted more sensitively to negative developments following an extended period of gains in chip shares.

The KOSPI had risen from the 5,000-point level earlier in the year to near 9,000 points the previous week, supported primarily by shares of Samsung Electronics and SK hynix. Analyst Seo Sang-young of Mirae Asset Securities noted that U.S. inflation data, Treasury yields, and questions regarding the sustainability of AI-related investment were scheduled for the current week. Researcher Han Ji-young of Kiwoom Securities described the week ahead as challenging, citing the release of the U.S. Consumer Price Index for May, the planned SpaceX listing, and Oracle earnings results.

Market participants also cited reports of strikes between Iran and Israel as a factor reducing risk appetite. Samsung Electronics fell 10.18 percent to 295,500 won, SK hynix declined 7.68 percent to 1.91 million won, and SK Square dropped 11.13 percent to 1.12 million won. Samsung Life Insurance decreased 8.97 percent to 375,500 won, and Samsung C&T fell 11.29 percent to 408,500 won. Hyundai Motor declined 8.71 percent to 639,000 won, and Hyundai Mobis dropped 12.2 percent to 612,000 won. LG Energy Solution fell 6.16 percent, Samsung SDI declined 11.44 percent, LG Electronics slipped 11.55 percent to 268,000 won, and Doosan Enerbility shed 10.25 percent to 85,800 won.

Naver rose 9.2 percent after reports of a joint project with Nvidia to build a global AI factory and the nomination of former Naver CEO Han Seong-sook as South Korea’s new prime minister. SK Networks increased 30 percent to 14,170 won following announcements of expanded AI infrastructure cooperation between SK Group and Nvidia.

The Korean won traded at 1,535.0 won per U.S. dollar at 3:30 p.m., up 4.1 won from the prior session, after opening at 1,555.2 won, the weakest level since March 6, 2009. Financial authorities stated they would take stern action against excessive volatility and one-sided movements in the foreign exchange market. The three-year Treasury yield rose 5.8 basis points to 3.940 percent, and the five-year government bond yield increased 7 basis points to 4.190 percent.

Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys added 5.8 basis points to 3.940 percent, and the return on the benchmark five-year government bonds gained 7 basis points to 4.190 percent.