SEOUL, Oct 15 : South Korea's benchmark stock index KOSPI fell 8 per cent on Thursday, triggering a circuit breaker for the first time in 2-1/2 months, as chipmakers tracked a technology-led Wall Street selloff after sticky US inflation data raised bets of further rate hikes.
The KOSPI was down 480.76 points at 5,528.05, as of 0338 GMT, hitting its lowest since July 29, when trading was last halted for 20 minutes under the market's circuit-breaker mechanism.
The halt marked the 10th activation of a circuit breaker on the KOSPI this year and the 16th in its history. Volatility had been stabilising since authorities tightened regulations in July to curb a retail boom in leveraged single-stock exchange-traded funds introduced in May.
The KOSPI was headed for a seventh straight session of losses, its longest losing streak since September 2024, while index volatility climbed to the highest since August 25.
"The market is reacting sensitively to whether capital raising will be sustainable and whether massive infrastructure investment will lead to real income, rather than revenue growth itself in AI services," said Seo Sang-young, an analyst at Mirae Asset Securities.
Chipmaker Samsung Electronics fell 9.70 per cent and peer SK Hynix lost 11.35 per cent, after the Philadelphia Semiconductor Index dropped 4.3 per cent overnight as persistent inflation concerns fuelled expectations of further US rate hikes and hammered AI-linked stocks.
The market "is struggling to find a new buyer" after buyback programmes at Samsung and SK Hynix have run their course, said Mixo Das, head of Korea equity strategy at J.P.Morgan in Hong Kong.
"Over the next few weeks, we expect that process to evolve. And we think the most volatile part of this flow discovery is likely behind us. On a six- to 12-month basis, we still think that all of these AI stocks will be substantially higher than where they currently stand," Das said.
Most other index heavyweights also declined, with battery maker LG Energy Solution down 5.45 per cent and Hyundai Motor down 6.38 per cent. Of the total 916 traded issues, only 52 shares advanced, while 855 declined.
Foreigners were net sellers of shares worth 2.9 trillion won ($2.15 billion).
The KOSPI has risen 31 per cent so far this year, though it remains 39 per cent below the record peak reached in late June.
The won was quoted at 1,348.2 per dollar on the onshore settlement platform, 0.44 per cent lower than its previous close at 1,342.3.
The most liquid three-year Korean treasury bond yield fell by 4.4 basis points to 3.841 per cent, while the benchmark 10-year yield fell by 5.7 basis points to 4.188 per cent.
($1 = 1,347.5900 won)