The collapse and the session's numbers
The Seoul Stock Exchange closed Thursday's session with a loss of more than 5 percent: according to The Korea Herald, the Kospi index shed 300 points, equal to 5.28 percent, ending at 5,383.80. The index had opened down 1.82 percent and then widened its losses during the morning. At 10:16, the market operator activated a sell-side sidecar, suspending for five minutes program trading of stocks listed on the Kospi.
The session was characterized by volumes described as light: 256.8 million shares traded for a value of 22.6 trillion won, about 16.8 billion dollars. Decliners outnumbered advancers by 534 to 344. In terms of flows, foreign investors sold net positions worth 3.39 trillion won, while institutions and individual investors bought 841.8 billion and 2.28 trillion won, respectively.
The link to the US elections and artificial intelligence
According to the source, the main trigger is the Democratic Party's electoral victory in the US midterm elections, described as a blue wave. The new Congress, which will take control in January, could introduce stricter rules on data centers for artificial intelligence, with possible repercussions for investment in the sector. Analyst Kim Seok-hwan of Mirae Asset Securities told the source that the Democratic wave hit the Kospi, dragging down semiconductor supply-chain stocks and fueling foreign selling; Democratic control of both chambers, he added, raises fears of tighter regulations on AI data centers and a slowdown in investment in the sector.
Sector performance and the currency
Among technology stocks, Samsung Electronics fell 7.57 percent to 201,500 won and SK hynix 9.46 percent to 1.26 million won. Hanmi Semiconductor fell 9.13 percent to 169,100 won and Samsung Electro-Mechanics 15.34 percent to 944,000 won. Bucking the trend, Hyundai Motor gained 3.53 percent to 293,500 won and Kia 5.22 percent to 100,800 won; SK Telecom advanced 0.13 percent to 77,500 won and Naver 8.26 percent to 184,900 won.
The newspaper also reports that, with growing hopes for diplomatic solutions to the conflicts in the Middle East and Eastern Europe, refining and defense stocks closed in negative territory: SK Innovation shed 7.68 percent to 114,200 won and Hanwha Aerospace 7.48 percent to 680,000 won. On the currency market, the won was quoted at 1,342.1 per dollar at 15:30, a slight depreciation of 0.6 won from the previous session's close. According to the source, the actual scope of future US regulatory measures on data centers for artificial intelligence remains to be verified.
