South Korea’s stock market ended nearly 10% lower on Tuesday as investors dumped AI-linked names amid a global tech selloff.
One of the world’s hottest stock markets this year, the Kospi tripped a circuit breaker and closed 9.99% lower on Tuesday in its biggest decline since March 4.
The selloff followed weakness on Wall Street, where Big Tech losses dragged the Nasdaq Composite down 1.3% on Monday even as the Dow rose 0.3%. Investors were also weighing higher Treasury yields and risks tied to the Iran conflict.
“The former generals of the market appear to have lost momentum, and investors are rotating into other areas of the market that are more defensive, less AI focused and offer more predictable cash flows,” wrote Chris Weston, the head of research at Pepperstone, in a post on X.
South Korea has been one of the world’s hottest equity markets this year, powered by a surge in artificial-intelligence-related stocks. But that rally has left the market especially exposed to any reversal in the global AI trade.
Chipmakers bore the brunt of Tuesday’s rout. Samsung Electronics closed 12.3% down, while SK Hynix ended 12.5% lower. Both companies had joined the $1 trillion club last month.
The weakness spread across Asia. Japan’s Nikkei 225 closed 3.6% lower, while Hong Kong’s Hang Seng Index fell over 2%. China benchmarks also declined.
US stock futures are also lower at 2.58 a.m. ET on Tuesday:
S&P 500 futures: 7,446.25, down 1.3%
Dow futures: 51,855.00, down 0.5%
Nasdaq futures: 29,969.50, down 2.2%
