KOSPI falls below 6,700 on AI growth, oil, rate concerns
Summary
The KOSPI fell below 6,700 Monday as worries about slowing AI development, high oil prices and elevated interest rates sparked heavy foreign selling. The benchmark index closed at 6,684.37, down 3.26 percent. SK hynix and Samsung Electronics both fell sharply, while bank stocks rose. The Kosdaq also declined, and the Korea Exchange began an after-hours market from 4 p.m. to 8 p.m.
Key Facts
- Foreign investors sold a net 3.29 trillion won worth of shares, while institutional investors sold 1.17 trillion won and retail investors bought 2.97 trillion won.
- The KOSPI opened 3.14 percent lower and at one point fell as much as 3.69 percent to 6,654.82 in mid-morning trading.
- SK hynix closed at 1,697,000 won, down 6.35 percent, and Samsung Electronics fell 4.05 percent to 249,000 won.
- The Kosdaq closed at 806.79, down 1.69 percent, and the won-dollar exchange rate ended at 1,347.3 won per dollar, up 1.4 won from the previous session.
KOSPI is displayed in the dealing room of Hana Bank in Seoul, Monday. The benchmark index closed at 6,684.37, down 3.26 percent from the previous session. Yonhap
The KOSPI fell below 6,700 Monday as concerns over a possible slowdown in AI development triggered heavy foreign selling, with high oil prices and elevated interest rates adding to investor unease.
The benchmark index closed at 6,684.37, down 3.26 percent from the previous session. It opened 3.14 percent lower and fell as much as 3.69 percent to 6,654.82 in mid-morning trading but slightly closed the gap.
Foreign and institutional investors sold a net 3.29 trillion won ($2.4 billion) and 1.17 trillion won worth of shares, respectively, while retail investors bought a net 2.97 trillion won.
SK hynix fell 6.35 percent to close at 1,697,000 won, while Samsung Electronics lost 4.05 percent to finish at 249,000 won.
Debate over slowing the pace of AI development weighed on investor sentiment toward semiconductor stocks. Anthropic CEO Dario Amodei proposed slowing the development of cutting-edge AI models to allow more time to put stronger safeguards in place, a proposal that drew support from Sam Altman and Elon Musk.
Investors are concerned that a slowdown in the AI development race could also temper the pace of data center investment and weaken growth in demand for high-performance semiconductors.
The U.S. core consumer price index rose 0.3 percent in August from the previous month, exceeding market expectations and heightening concerns over the possibility of an interest rate hike ahead of this week's Federal Open Market Committee meeting.
Persistently high oil prices also weighed on the market. Anticipated talks over passage through the Strait of Hormuz were postponed, while Brent crude climbed back above $108 a barrel after operations at Saudi Arabia's East-West oil pipeline were halted. The yield on the benchmark 10-year U.S. Treasury briefly touched 5 percent.
Bank stocks demonstrated rare strength in the declining market, as expectations that a prolonged cycle of interest rate hikes will improve banks' net interest margins (NIMs) fueled buying. KB Financial, Shinhan Financial, Hana Financial and Woori Financial jumped 2.08 percent, 1.51 percent, 2.18 percent and 4.99 percent, respectively.
The Kosdaq also fell 1.69 percent to close at 806.79.
The won-dollar exchange rate closed at 1,347.3 won per dollar, up 1.4 won from the previous session.
Meanwhile, stock trading hours are being extended starting Monday. The Korea Exchange is launching an after-hours market where investors can buy and sell shares in real time from 4 p.m. to 8 p.m.
Explore More
- Q.
- Q.
- Q.