Seoul shares down nearly 4 pc as tech shares slide
Seoul, June 5
Seoul shares traded nearly 4 per cent lower on Friday as investors locked in profits from a recent tech-led rally while monitoring uncertainty over US-Iran peace negotiations.
After opening 3.44 percent lower, the Korea Composite Stock Price Index (KOSPI) lost 334.97 points, or 3.88 percent, to 8,304.44 as of 11:20 a.m., recovering some of its earlier losses after plunging as much as 6.88 percent.
The Korea Exchange suspended program trading for the KOSPI for five minutes at around 9:08 a.m., a measure issued when the KOSPI 200 Futures index decreases 5 percent or more for at least one minute, reports Yonhap news agency.
Overnight, major U.S. stocks closed mixed. The Dow Jones Industrial Average rose 1.73 percent, and the S&P 500 added 0.41 percent to 7,584.31. The tech-heavy Nasdaq composite slipped 0.09 percent as declines in artificial intelligence (AI)-related stocks weighed on the index.
Broadcom tumbled more than 12 percent after the U.S. chipmaker's quarterly results and outlook for AI-related revenue fell short of investors' elevated expectations.
Oil prices retreated after three consecutive sessions of gains, as investor sentiment improved following reports that Israel had agreed to a conditional ceasefire with Lebanon.
In Seoul, most large-cap shares retreated. Market bellwether Samsung Electronics fell 3.56 percent, and its rival chipmaker SK hynix sank 5.96 percent.
AI investment firm SK Square decreased 5.51 percent, and top automaker Hyundai Motor fell 3.14 percent.
LG Electronics shed 8.23 percent, and Naver decreased 5.98 percent.
The Korean won was trading at 1,546.1 won against the U.S. dollar as of 11:20 a.m., down 16.4 won from the previous session, said the report.
— IANS
Reader Comments
Interesting how AI stocks like Broadcom falling 12% is dragging everything down. The AI hype cycle correction was overdue. Also, the won depreciating to 1546 per dollar is a big worry - shows capital flight from emerging markets. Korean export economy will struggle.
Market cycles are natural. Last week everyone was euphoric about AI rally, now this. 📉 But I'm more concerned about the US-Iran peace negotiations uncertainty - that affects global oil prices directly. India is a major oil importer, so if oil spikes again, our CAD will worsen. Hope Modi govt is watching this closely.
The KOSPI dropping nearly 4% while US markets were mixed shows how interconnected Asian markets are. Interesting that Israel agreeing to a conditional ceasefire with Lebanon helped oil prices retreat - that's a positive. But tech corrections tend to be sharp and fast. Hold tight, folks. 🛡️
Look at LG Electronics - down 8.23%! And Naver down almost 6%. This is brutal for Korean retail investors. Also, the program trading suspension shows extreme volatility. For us in India, it's a reminder that global macros matter. Our IT stocks might also feel pressure today. Stay safe, traders. ⚠️
Hate to see markets in red, but this correction was overdue. The AI rally had become too frothy - Broadcom's results just triggered the panic. 📊 Also, the won weakening 16.4 won in a single session is alarming. Korean exporters will feel the pinch. Let's see if our Nifty holds 22000 today.