Global Market: South Korea’s Kospi plunges over 7% as chip stocks tumble on CXMT concerns

South Korea’s benchmark Kospi index plunged more than 7% on Tuesday, triggering a temporary trading curb, as concerns over growing competition from Chinese semiconductor makers rattled investor sentiment and dragged down major technology stocks, according to a report by Reuters.

The sell-off followed an overnight decline in US memory-chip maker Micron Technology amid reports of rapid technological advances by Chinese rival ChangXin Memory Technologies (CXMT), raising concerns about the competitive position of global memory-chip manufacturers, the report stated.

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The Korea Exchange halted programme sell orders for five minutes at 9:47 a.m. local time after the KOSPI 200 futures index fell 5.08%, or 51.20 points, to 955.02.

The Kospi was down 382.18 points, or 5.93%, at 6,002.06 as of 0213 GMT. A fifth consecutive session of losses would mark the index’s longest losing streak since September 2024.

Investor sentiment weakened as concerns mounted that Chinese semiconductor manufacturers were narrowing the technology gap with global rivals, putting pressure on South Korea’s technology-heavy stock market, Reuters reported, citing Kang Jin-hyuk, an analyst at Shinhan Investment & Securities.

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Shares of Samsung Electronics fell 7.19%, while SK Hynix plunged 8.72%, reflecting the sharp sell-off in South Korea’s memory-chip sector.

Losses extended beyond technology stocks, with battery maker LG Energy Solution declining 4.15%. Hyundai Motor dropped 5.78%, while Kia Corp fell 3.52%.

Among other major stocks, POSCO Holdings shed 4.85%, while Samsung BioLogics slipped 1%.

Market breadth remained sharply negative, with 832 stocks declining and 66 advancing among the 915 issues traded.

Foreign investors were net sellers of South Korean shares worth 2,065.3 billion won, adding to the selling pressure on equities.

In the currency market, the South Korean won weakened 0.22% to 1,338.8 per dollar on the onshore settlement platform, compared with its previous close of 1,335.8.

South Korean government bond yields moved lower amid the market turmoil. The yield on the most liquid three-year Treasury bond fell 4.8 basis points to 3.874%, while the benchmark 10-year yield declined 6.9 basis points to 4.250%.

The sharp decline in the Kospi underscored growing investor concerns over intensifying competition in the global semiconductor industry, with developments in China adding to pressure on South Korea’s technology-heavy equity market.

(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)