KOSPI plunges 4% as Samsung, SK Hynix shares slide

South Korean stocks fell sharply on Thursday, with the benchmark KOSPI sliding more than 4%, as semiconductor shares tracked overnight losses in US technology stocks amid concerns that the US midterm election results could lead to tighter artificial intelligence (AI) regulations and a slowdown in investment, Reuters reported.

The KOSPI declined 227.68 points, or 4.01%, to 5,459.70 as of 0157 GMT. The index had dropped more than 5% earlier in the session, triggering a sidecar trading curb, which temporarily suspends program trading.

Chipmakers led the decline, with Samsung Electronics falling 5.73% and SK Hynix losing 7.52%. The sell-off followed a 3.1% drop in the Philadelphia Semiconductor Index on Wednesday, according to Reuters.


Read more: Asian shares mostly advance following US midterms, though Kospi falls on selling of chipmakers

The weakness in semiconductor stocks came despite a strong rally on Wall Street, where US equities closed sharply higher on Wednesday. A sweeping victory for Democrats in the US midterm elections eased political uncertainty and boosted risk appetite, although data centre stocks declined amid concerns over tighter AI regulations.

Battery stocks also retreated after advancing in the previous session on expectations that Democrats' climate-friendly policies could support electric vehicle demand. LG Energy Solution fell 2.82%, while Samsung SDI and SK Innovation dropped 5.14% and 6.39%, respectively.

Readmore: US stocks today: Dow rallies 1,500 pts, S&P, Nasdaq over 1% as Democrats win midterm elections

Among other major stocks, Hyundai Motor gained 3.70%, and Kia Corp advanced 4.38%. POSCO Holdings declined 1.09%, while Samsung BioLogics rose 2.01%.

Market breadth remained negative, with 483 stocks declining against 391 advancing among 908 traded issues. Foreign investors were net sellers of South Korean shares worth 1.3 trillion won ($969.07 million), Reuters reported.

In the currency market, the South Korean won weakened 0.05% to 1,341.7 per dollar on the onshore settlement platform, compared with its previous close of 1,341.0.

South Korean government bond yields moved lower. The three-year treasury bond yield fell 3.3 basis points to 3.677%, while the benchmark 10-year yield declined 7.2 basis points to 3.896%.

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