The opening crash
The Seoul stock exchange opened sharply lower on Friday, following the heavy decline on Wall Street the previous day. According to The Korea Herald, the benchmark Kospi index at 9:25 was down 460.33 points, or 8.55%, at 4,923.47 points.
After an opening already down 2%, the Korean stock exchange operator activated the circuit breaker shortly after the opening bell, suspending trading for 20 minutes due to heavy selling pressure on the benchmark index. The material also indicates that blue-chip semiconductor stocks lost about 10% in intraday trading, dragging the Kospi below the 5,000-point threshold.
The causes: US elections and the Strait of Hormuz
At the root of the correction are the results of the midterm elections in the United States: according to the source, investors fear that a Democratic victory could slow the construction of data centers, infrastructure that has met widespread public opposition. Overnight, US indices closed sharply lower: the S&P 500 lost 4.36% and the tech-heavy Nasdaq 5.52%.
Also weighing is the rise in oil prices, after Iranian forces declared that at least five tankers were damaged in the Strait of Hormuz. The material does not clarify the size of the increase or the consequences for the energy market.
The knock-on effects on Korean stocks
On the Seoul listing, chipmakers recorded the steepest losses: Samsung Electronics fell 9.98% and SK hynix 11.63%. Automaker Hyundai Motor shed 6.47%, financial company KB Financial 5.03%, and defense group Hanwha Aerospace 4.56%.
The Korean won was quoted at 1,357.4 per dollar at 9:25, down 1.9 won from the previous session's close. Based on the available material, it remains to be verified whether the day's performance confirmed or corrected the losses recorded at the opening and what concrete effects the US elections will have on investment decisions in data centers.
