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SEOUL — Seoul shares plunged by nearly 6 percent on Wednesday, extending a sell-off that began the previous session with a nearly 11 percent crash, as investors dumped semiconductor stocks amid growing skepticism over whether massive spending on artificial intelligence (AI) will generate sufficient returns. The benchmark Korea Composite Stock Price Index (KOSPI) lost 360.42 points, or 5.98 percent, to close at 5,663.24, after plunging to an intraday low of 5,262.77.

Coverage Comparison

Yonhap News reported that the KOSPI opened 1.09 percent higher before reversing course and tumbling by up to nearly 12 percent in afternoon trading. At 12:31 p.m., the Korea Exchange (KRX) activated a marketwide circuit breaker, halting trading in KOSPI-listed stocks for 20 minutes. The local currency strengthened against the U.S. dollar.

The reports attributed the broad-based sell-off to growing skepticism over whether hefty AI-related investments by major technology companies could generate sufficient returns to justify their lofty market valuations. Na Jeong-hwan, an analyst at NH Investment & Securities Co., was quoted as saying that "rising competition from China following the successful listing of ChangXin Memory Technologies (CXMT) also weighed on investor sentiment."

Trade volume was high at 449.29 million shares worth 47.83 trillion won (US$33 billion), with losers sharply outnumbering winners 804 to 91. Foreigners and individuals offloaded a net 1.23 trillion won and 1.97 trillion won worth of stocks, respectively, while institutions purchased a net 3.16 trillion won.

Key Claims

  • Seoul shares plunged by nearly 6 percent on Wednesday.
  • The KOSPI lost 360.42 points, or 5.98 percent, to close at 5,663.24.
  • The local currency strengthened against the U.S. dollar.
  • Trade volume was high at 449.29 million shares worth 47.83 trillion won.
  • Foreigners and individuals offloaded a net 1.23 trillion won and 1.97 trillion won worth of stocks, respectively.
  • Bond prices closed higher, with the yield on three-year Treasurys falling 2.9 basis points to 3.800 percent.
  • Rising competition from China following the successful listing of ChangXin Memory Technologies (CXMT) weighed on investor sentiment.
In Seoul, tech stocks led the decline. Market bellwether Samsung Electronics fell 5.23 percent to 208,500 won, and SK hynix plunged 9.61 percent to 1.4 million won. Top carmaker Hyundai Motor tumbled 2.88 percent to 353,500 won, and its sister Kia sank 1.15 percent to 120,400 won. Internet giant Naver slid 4.05 percent to 201,500 won, and energy firm Doosan Enerbility dipped 6.03 percent to 60,800 won. Among gainers, shipping firm HMM rose 1.25 percent.