South Korea’s stock market saw another rough session as a sharp selloff in artificial intelligence and semiconductor shares dragged the benchmark Kospi index down by more than 8%, briefly forcing a trading halt. The steep fall showed how nervous investors have become about whether the recent rally in AI-linked stocks had gone too far and whether future profits can justify such high valuations.
The biggest pressure came from technology heavyweights Samsung Electronics and SK Hynix, which together make up more than half of the Kospi’s total market value. Shares of both companies fell by around 9% during trading, prompting the Korea Exchange to activate a 20-minute circuit breaker to cool the market. The index later recovered some ground, but the mood among investors remained cautious.
The latest drop is part of a wider global technology selloff. Investors have grown more careful after signs that the cost of building and running advanced AI systems is rising quickly. Higher semiconductor prices, heavy spending on AI infrastructure and doubts over whether demand will keep pace have led many traders to book profits after months of strong gains.
The weakness was not limited to South Korea. Japan’s Nikkei index also fell sharply as technology shares came under pressure. Companies closely tied to the AI boom, including major chipmakers and tech investors, recorded notable losses. That showed how concerns about the AI sector are spreading across Asian markets.
For investors, the latest swings are a reminder that fast-growing technology sectors can also see fast changes in sentiment. As companies prepare to report earnings and update markets on AI investments, volatility is likely to stay high, with each new development shaping confidence across the global tech sector.
Market analysts say the correction does not necessarily mean the AI story is over. Instead, they believe investors are rechecking valuations after a powerful rally that had made South Korea one of the world’s best-performing markets earlier this year.
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