PiCK
Kospi Falls Below 5,000 After 8% Plunge Triggers Circuit Breaker
Summary
- The report said the Kospi plunged 8% shortly after the open, breaking below the 5,000 level and triggering a circuit breaker.
- The report said Samsung Electronics and SK Hynix fell 9.98% and 11.79%, respectively, widening the index’s losses.
- The report said sentiment toward semiconductor shares froze amid anxiety over AI investment in the US and concern about data center regulation.
Forecast Trend Report by Period
Trading Halted for 20 Minutes Three Minutes After the Open
Samsung Electronics, SK Hynix Slide in Tandem
South Korea’s Kospi plunged more than 8% shortly after the open on Nov. 6, prompting a temporary halt in trading on the main board. A sharp selloff in heavyweight semiconductor stocks, fueled by mounting concern over US artificial intelligence investment, pushed the index below 5,000 for the first time in about 10 months.
The Korea Exchange activated a circuit breaker on the benchmark stock market at 9:03:33 a.m. The Kospi was down 460.33 points, or 8.55%, at 4,923.47 from the previous session. It was the first time the index had fallen below 5,000 since January.
A circuit breaker is triggered when the benchmark index remains down more than 8% from the previous close for at least one minute. Once activated, trading across the entire market is suspended for 20 minutes.
Selling was concentrated in large-cap chip stocks. Samsung Electronics fell 9.98% to 181,400 won ($131), while SK Hynix dropped 11.79% to 1.115 million won ($807). The simultaneous slump in the two shares added to the index’s losses.
Worries over data center regulation that surfaced after the US midterm elections spilled into South Korea’s stock market. With Democrats controlling both the Senate and the House of Representatives, caution grew that regulation of data center construction and the AI industry could be tightened. Doubts over whether heavy AI investment would generate sufficient returns further chilled sentiment toward semiconductor shares.
AI-related technology stocks were also hit by heavy selling on Wall Street overnight. The three major US indexes all tumbled, wiping out the previous day’s gains that had been driven by hopes that election uncertainty would ease.
