Seoul:South Korean shares dropped more than 3 percent on Thursday as investors capitalized on gains from major chip shares, following a rebound in the previous session. Concerns persisted over investments in the artificial intelligence (AI) value chain, contributing to the market's downturn. The Korean won gained strength against the U.S. dollar.
According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) fell by 201.8 points, or 3.52 percent, closing at 5,533.77. The index initially opened down by 1.14 percent, briefly turned positive to reach an intraday high of 5,740.28, before resuming its decline with losses deepening sharply.
The KOSPI had previously rebounded over 3 percent, recovering from significant losses as semiconductor shares rallied. In the U.S., stock performance was mixed overnight as AI-related shares improved after SpaceX's quarterly results. The Dow Jones Industrial Average increased by 0.69 percent, the S&P 500 by 0.58 percent, and the Nasdaq Composite by 1.05 percent.
Meta Platforms, after reporting solid earnings, reinforced its investment in the AI sector. Analyst Lee Kyoung-min from Daishin Securities noted that despite Meta and Tesla's better-than-expected earnings, concerns over profitability amid substantial AI investments remained. KOSPI's losses were exacerbated by the conclusion of SK hynix's share buyback program, reducing market demand support.
Trade volume was light, with 201.17 million shares worth 13.7 trillion won (US$10.4 billion) exchanged. Decliners outnumbered advancers by 706 to 174. Foreign investors and individuals purchased net amounts of 6.1 billion won and 38.1 billion won, respectively, while institutions sold a net 46.3 billion won.
Technology shares led the decline, with Samsung Electronics falling 4.03 percent to 214,500 won and SK hynix dipping 5.49 percent to 1.22 million won. Samsung Electro-Mechanics saw a decrease of 1.97 percent to 1.15 million won, despite opening higher on news of its partnership with Nvidia.
The Korean won was quoted at 1,324.2 won against the U.S. dollar as of 330 p.m., an increase of 1 won from the previous stock trading session's close.