KOSPI falls 8%, triggering circuit breaker, as Asian tech stocks slide on US inflation

Centre · 1South Korea's benchmark KOSPI index fell 8 per cent on Thursday 15 October, triggering a circuit breaker for the first time in 2-1/2 months, as chipmakers tracked a technology-led Wall Street selloff. 1 Centre · 1As of 0338 GMT the index was down 480.76 points at 5,528.05, its lowest since 29 July, when trading was last halted for 20 minutes. CNA said the halt was the 10th circuit-breaker activation on the KOSPI this year and the 16th in its history. 1 Centre · 1Samsung Electronics fell 9.70 per cent and SK Hynix lost 11.35 per cent after the Philadelphia Semiconductor Index dropped 4.3 per cent overnight. LG Energy Solution fell 5.45 per cent and Hyundai Motor 6.38 per cent. Of 916 traded issues, 855 declined and 52 advanced, and foreigners were net sellers of 2.9 trillion won ($2.15 billion). 1

Centre · 1The trigger was US data: consumer price inflation rose to 3.7 per cent annually in September, above August's 3.4 per cent and the 3.6 per cent forecast, with core inflation at 2.6 per cent, also above expectations. Analysts quoted said this raised the chance of a US Federal Reserve rate hike. 2 Centre · 1Elsewhere in Asia, The National reported Tokyo's Nikkei 225 down 5.12 per cent at midday, Hong Kong's Hang Seng down 1 per cent and the Shanghai Composite down 1.75 per cent. Its earlier figure for the KOSPI was a slump of more than 7 per cent. 2 Centre · 2Analysts offered different explanations. Capital.com's Kyle Rodda pointed to the AI-stock selloff and tighter financial conditions from higher yields and a stronger US dollar, plus fears about chip competition and peak profit growth. Mirae Asset Securities' Seo Sang-young said the market was reacting to whether capital raising and massive AI infrastructure investment will turn into real income. J.P.Morgan's Mixo Das said the market was struggling to find a new buyer after Samsung and SK Hynix buybacks ran their course. 2 1

Centre · 1Das said the most volatile part of the process was likely behind, and that J.P.Morgan expects AI stocks to be substantially higher on a six- to 12-month view. 1 Centre · 1The KOSPI was headed for a seventh straight losing session, its longest streak since September 2024, and has risen 31 per cent this year. CNA said volatility had been stabilising since authorities tightened rules in July on leveraged single-stock ETFs, introduced in May. 1 Centre · 2The International Monetary Fund, in a Thursday report, warned that a correction in AI-related investment or asset valuations could weigh disproportionately on Asia, and that uncertainty over US monetary policy could keep its markets volatile. In Seoul, the won was quoted at 1,348.2 per dollar, 0.44 per cent weaker, while the three-year and 10-year bond yields fell to 3.841 and 4.188 per cent. 2 1