South Korea’s benchmark stock index, the KOSPI, witnessed another sharp decline on Friday, forcing the exchange to temporarily halt trading for the second time this week as a wave of selling swept through technology and semiconductor stocks amid mounting concerns over the artificial intelligence (AI) sector.
The Korea Exchange suspended trading for 20 minutes after the benchmark index fell beyond the threshold that triggers a circuit breaker. During the session, the KOSPI tumbled as much as 9 per cent before trimming some of its losses. It was last seen trading around 5.8 per cent lower after hitting an intraday low of 8,126.84.
The latest sell-off comes just days after the index suffered a massive 10 per cent fall on June 23, marking one of its steepest single-day declines in history. Over the week, the KOSPI has lost nearly 19 per cent, highlighting growing nervousness among investors.
Semiconductor giants drag the market lower
The biggest pressure came from South Korea’s leading chipmakers, Samsung Electronics and SK Hynix, both of which plunged more than 10 per cent at one stage during Friday’s session.
Together, the two companies make up close to 60 per cent of the KOSPI’s overall market weight, making their share price movements a key driver of the benchmark’s performance.
Foreign investors also intensified their selling, offloading stocks worth nearly 5 trillion won, or around Rs 3.1 lakh crore, during the trading session.
Given Samsung and SK Hynix’s critical role in the global semiconductor supply chain, their steep losses also dampened investor confidence across broader Asian markets.
Apple, Microsoft price hikes raise fresh worriesInvestor sentiment weakened further after Apple announced price increases for several products, including iPads and MacBooks, citing rising memory chip costs.
The move sparked concerns that higher semiconductor prices could eventually reduce consumer demand for electronic devices. Apple shares dropped 6.1 per cent overnight, wiping out nearly $250 billion in market value.
Adding to market concerns, Microsoft also raised prices for Xbox gaming consoles in several countries, reinforcing fears that rising technology costs are increasingly being passed on to consumers.
The negative sentiment overshadowed strong quarterly earnings from memory chip manufacturer Micron Technology, whose shares jumped nearly 16 per cent overnight to an all-time high.
As major suppliers to leading global technology companies, Samsung Electronics and SK Hynix have a significant influence on investor sentiment across Asian markets. Sharp declines in their shares often spill over into regional equities, including India.
What it could mean for Indian markets
The steep correction in South Korea’s KOSPI may lead to near-term volatility in Indian equities by weakening global risk appetite and encouraging foreign institutional investors (FIIs) to reduce exposure to emerging markets.
Technology stocks in India could face pressure as investors reassess global demand for semiconductors and AI-related businesses. Other sectors such as metals, real estate and PSU banks may also experience temporary weakness if risk-off sentiment persists.
Despite these global headwinds, India’s market fundamentals remain relatively strong. Robust domestic consumption, continued government infrastructure spending, healthy corporate earnings and consistent inflows from domestic institutional investors (DIIs) are expected to provide support and help cushion the broader market from deeper declines.
