Lead
SEOUL — South Korean stocks crashed more than 10% on Tuesday, marking the benchmark KOSPI's worst session in months, as investors fled chipmakers amid growing skepticism about the returns from massive artificial intelligence (AI) investments. The sell-off extended into Wednesday, with the KOSPI falling by as much as 12.6% at one point, according to The Guardian, reaching its lowest level since early April.According to Yonhap News Agency, the KOSPI lost 732.09 points, or 10.84%, to close at 6,023.66 on Tuesday, after plunging to 5,830.39 at one point. It was the lowest closing since April 14, when the index finished at 5,967.75. The Korea Exchange activated a marketwide circuit breaker at 10:14 a.m., halting trading of KOSPI-listed shares for 20 minutes, as the index plunged more than 8% in the morning.
On Wednesday, the KOSPI turned sharply lower again, falling 376.01 points, or 6.24%, to 5,647.65 as of 11:20 a.m., according to Yonhap. The Korea Exchange activated a sell-side sidecar, suspending program trading for five minutes around 10:55 a.m.
Coverage Comparison
The Guardian and Yonhap provided differing accounts of the market's decline, with The Guardian emphasizing the role of disappointing earnings from SK Hynix and the broader global context, while Yonhap focused on the domestic market mechanics and trading halts.The Guardian reported that SK Hynix's record second-quarter profits still fell short of investor expectations, triggering a sell-off that drove its shares down by as much as 16%. Samsung Electronics shares also tumbled, trading almost 10% lower. The two companies together account for more than half of the KOSPI's market capitalization, giving them outsized influence over the market, The Guardian noted.
Yonhap, meanwhile, reported on the technical triggers for trading halts, including the circuit breaker on Tuesday and the sidecar on Wednesday, and cited the overnight sell-off on Wall Street as a key driver. The Korean wire service also noted that the PHLX chip index, a gauge of U.S. semiconductor giants, extended its recent selloff, falling 2.2%.
Both outlets attributed the sell-off to investor concerns about AI spending, but The Guardian also highlighted competition from cheaper Chinese companies and a report that China has begun mass production of homegrown deep ultraviolet (DUV) chip-making tools. The Guardian also mentioned that Nvidia was in discussions with OpenAI about providing $250bn for a massive datacentre project in Ohio, news that knocked Nvidia's shares 5% lower.
Key Claims
- The KOSPI lost 732.09 points, or 10.84%, on Tuesday, closing at 6,023.66, and fell by as much as 12.6% on Wednesday, according to Yonhap and The Guardian.
- SK Hynix reported record profits for the second quarter but undershot investors' expectations, leading to a share price drop of as much as 16%, as reported by The Guardian.
- Samsung Electronics shares traded almost 10% lower on Wednesday, after plunging 9.84% on Tuesday, according to The Guardian and Yonhap.
- The Korea Exchange activated a marketwide circuit breaker on Tuesday at 10:14 a.m. and a sell-side sidecar on Wednesday, according to Yonhap.
- China has begun mass production of homegrown deep ultraviolet (DUV) chip-making tools, a claim carried by The Guardian.
- Nvidia was in discussions with OpenAI about providing $250bn for a datacentre project in Ohio, as reported in The Guardian, citing a Wall Street Journal report.
- Brent crude reached $87.14 a barrel, a rise of about 3.6%, in early trading on Wednesday, according to The Guardian, amid geopolitical tensions.