Stocks dip over 4 pct on extended chip rout, Mideast tensions

Lead

South Korean stocks closed more than 4 percent lower on Monday, as renewed worries over artificial intelligence (AI) infrastructure spending and escalating Middle East tensions weighed on investor sentiment. The benchmark Korea Composite Stock Price Index (KOSPI) plunged 304.33 points, or 4.46 percent, to 6,516.27, after falling as low as 6,472.80, Yonhap News Agency reported.

Coverage Comparison

All reporting of this story comes from Yonhap News Agency, which provided consistent details across its multiple versions of the article. The reports agree on the key market figures and the causal factors behind the sell-off, attributing the decline to unfavorable factors related to semiconductors and worsening conflict risks between the United States and Iran.

Key Claims

The KOSPI fell 304.33 points, or 4.46 percent, to close at 6,516.27 points. Trade volume was moderate at 339.5 million shares worth 28.4 trillion won (US$19.2 billion), with losers far outnumbering winners 796 to 97.

Institutional investors were net sellers, offloading 919.1 billion won, while foreigners and retail investors bought a combined net 864.4 billion won.

The Korean won rose against the U.S. dollar, according to the reports.

On Friday, U.S. stocks closed lower, weighed down by a decline in semiconductors, as the latest AI model unveiled by Chinese startup Moonshot renewed concerns over global spending on AI infrastructure, including semiconductors. The model, called Kimi K3 and unveiled Friday (local time), is considered to deliver performance approaching most advanced AI models from the U.S.' OpenAI and Anthropic at a much lower cost, raising speculation over whether the massive capital spending from hyperscalers could be justified, according to analysts.

Escalating tensions in the Middle East, after the U.S. military announced a third U.S. soldier died in Iraq during back-and-forth attacks between the U.S. and Iran, also weighed on the KOSPI, the reports said.

Market top-cap Samsung Electronics dipped 4.31 percent to 244,000 won, while rival SK hynix shed 4.23 percent to 1,764,000 won, according to Yonhap.

Bond prices, which move inversely to yields, closed lower, the reports noted.

Perspectives

Lee Kyoung-min, an analyst at Daishin Securities, attributed the decline to "unfavorable factors related to semiconductors and worsening conflict risks between the United States and Iran," which dampened investor sentiment. He added that concerns over the justification of massive capital spending on AI infrastructure added downward pressure to the stock market.