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Seoul shares fell more than 1 percent on Thursday, as retail investors heavily sold tech stocks following deep declines over the previous two sessions, according to Yonhap News. The drop came amid lingering concerns over artificial intelligence (AI) spending and uncertainty about the Federal Reserve's interest rate outlook.

The Korean won strengthened against the U.S. dollar.

Coverage comparison

Yonhap reported the session in two versions, and while the core figures were consistent, the two accounts differed on the flow of institutional and foreign money. One version said institutions and foreigners purchased a net 66.3 billion won and 1.34 trillion won worth of stocks, respectively. The other said the two groups offloaded a net 66.3 billion won and 1.34 trillion won. Both versions agreed that individuals sold a net 1.43 trillion won.

A separate addendum to one of the reports noted that bond prices closed lower, with the yield on three-year Treasurys rising 3.1 basis points to 3.831 percent and the return on five-year government bonds climbing 4.1 basis points to 4.078 percent.

What happened

After volatile trading, the benchmark Korea Composite Stock Price Index (KOSPI) lost 69.68 points, or 1.23 percent, to close at 5,593.56. The index swung widely, rising as high as 5,976.82 and plunging to an intraday low of 5,547.41. It had opened 0.33 percent higher before reversing course into negative territory.

The broad-based sell-off came amid concerns over whether heavy AI-related investment by major technology companies can generate sufficient returns to justify their elevated valuations, Yonhap reported, citing analysts.

Trade volume was moderate at 375.17 million shares worth 37.6 trillion won (US$26.2 billion). Gainers outnumbered losers 606 to 277.

Tech stocks led the decline: Samsung Electronics fell 0.72 percent to 207,000 won, and SK hynix plunged 5.64 percent to 1.32 million won. Hyundai Motor declined 0.71 percent to 351,000 won, and Korean Air sank 0.6 percent to 24,650 won.

Fed and bond context

Yonhap noted that the Federal Reserve, on Wednesday U.S. time, left its benchmark rate unchanged at 3.5-3.75 percent — the fifth consecutive meeting without a change — and offered little guidance on the future path of rates, leaving investors uncertain about the timing of any easing.

The bond yield figures, provided as an addendum in one reporting, show that yields on short- and medium-term government debt increased, a movement that typically accompanies falling bond prices.

Key Claims

  • The KOSPI closed at 5,593.56, down 69.68 points, or 1.23 percent, on Thursday.
  • Retail investors sold a net 1.43 trillion won; institutional and foreign investors flows were reported contradicts by different versions of Yonhap's coverage.
  • The Fed held rates steady for the fifth consecutive meeting, and AI spending worries were cited as the primary driver of the sell-off.
  • The Korean won strengthened against the U.S. dollar.
  • Trade volume was 375.17 million shares worth 37.6 trillion won, with gainers outpacing losers.