Seoul:South Korean shares experienced a significant decline of nearly 4 percent on Tuesday, as investors sought to capitalize on recent gains in major chip stocks amidst ongoing concerns about the artificial intelligence (AI) value chain. Meanwhile, the Korean won showed an increase against the U.S. dollar.
According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) fell by 215.27 points, or 3.73 percent, closing at 5,552.74 after hitting a low of 5,493.24 during the session. The index opened 0.6 percent lower and continued to decline due to increasing worries over AI-related sectors and escalating protests in France, which diminished the appetite for risky assets.
The KOSPI had previously seen gains over two consecutive sessions following a sharp sell-off driven by AI investment concerns. This decline came after a 21 percent drop over seven trading sessions from October 6 through the previous Thursday. In the U.S., technology shares rebounded overnight, leading to mixed results in stock markets after their steepest weekly drop since June.
Lee Kyoung-min, an analyst at Daishin Securities, highlighted that unresolved issues related to credit risks and profitability from AI investments are hindering the sustainability of the market rebound. Profit-taking after recent gains contributed to the market's return to negative territory.
The trading volume was light, with 259.75 million shares worth 16 trillion won (approximately US$12.97 billion) changing hands, and decliners significantly outnumbering advancers, 771 to 117. Foreign investors and institutions sold a net 535.4 billion won and 1 trillion won, respectively, while individual investors bought a net 900 billion won.
Technology shares led the decline among market heavyweights. Samsung Electronics fell 2.98 percent to close at 211,500 won, and SK hynix dropped 4.23 percent to 1.22 million won, marking its lowest close since April. SK Square, the parent firm of SK hynix, declined 5 percent to 741,000 won, while Samsung Electro-Mechanics decreased by 1.28 percent to 1.16 million won.
The Korean won was quoted at 1,328.1 against the U.S. dollar, an increase of 2.2 won from the previous session's close.