Seoul shares turn lower late Wednesday morning on tech losses

The dealing room of Hana Bank in Seoul during morning trading hours, Wednesday. Yonhap

Seoul shares turned lower late Wednesday morning as investors dumped tech stocks amid concerns over future artificial intelligence (AI) spending.

After opening 1.09 percent higher, the benchmark Korea Composite Stock Price Index (KOSPI) turned sharply lower, falling 376.01 points, or 6.24 percent, to 5,647.65 as of 11:20 a.m.

The Korea Exchange, the country's bourse operator, activated a sell-side sidecar for the KOSPI following its sharp decline, with program trading in KOSPI-listed shares suspended for five minutes around 10:55 a.m.

On Tuesday, the index plunged 10.84 percent to close at 6,023.66, driven by rising competition from China, which led to a heavy sell-off of AI-related stocks, such as chipmakers.

The extended sell-off comes as investors question whether massive spending on AI will generate returns enough to justify tech firms' elevated valuations.

Overnight, U.S. stocks ended mixed. The Dow Jones Industrial Average gained 1.03 percent, while the tech-heavy Nasdaq composite slipped 0.22 percent.

Individuals sold a net 1.37 trillion won ($943 million) worth of stocks, while institutions and foreigners bought a net 1.27 trillion won and 91.2 billion won, respectively.

Most shares traded in negative territory.

Market bellwether Samsung Electronics plunged 5.45 percent, and SK hynix dived 10.32 percent.

Samsung Electro-Mechanics, an electronic component affiliate of Samsung Electronics, plummeted 9.07 percent, and LG Electronics sank 5.21 percent.

Internet giant Naver fell 3.1 percent, and leading mobile carrier SK Telecom shed 4.99 percent.