Seoul shares tumble over 4 pc on tech losses amid lingering AI concerns

Seoul, Aug 6 (IANS) South Korean stocks tumbled more than 4 per cent on Thursday due to losses in tech shares amid lingering concerns over profitability of artificial intelligence (AI) spending. The local currency rose against the US dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) fell 4.58 per cent, or 301.88 points, to close at 6,296.38, after falling as low as 6,238.32, reports Yonhap news agency.

The index had risen 1.62 per cent and 3.76 per cent on Tuesday and Wednesday, respectively, driven by eased concerns over AI profitability.

After opening 1.81 percent lower, the KOSPI extended its losses, prompting the bourse operator to activate a sell-side sidecar for the KOSPI for five minutes at 10:18 a.m., halting program trading for KOSPI-listed shares.

Trade volume was light at 281.8 million shares worth 25.9 trillion won ($18.2 billion), with winners outnumbering losers 489 to 380.

Foreigners sold a net 3.33 trillion won worth of stocks, and institutions offloaded a net 121. 8 billion won, while individuals purchased a net 3.34 trillion won.

Overnight on Wall Street, investors sold off Nasdaq-listed tech heavyweights, like Alphabet and Advanced Micro Devices, pushing down the tech-savvy index by 0.83 percent on doubt about profitability of large-scale investment in AI infrastructure.

However, signs of eased tensions in the Middle East pushed up the Dow Jones Industrial Average to rise 0.49 percent to a new record high.

“Despite improvement in geopolitical and macroeconomic conditions, the KOSPI lost momentum due to losses in U.S. chip stocks and profit-taking,” said Han Ji-young, an analyst from Kiwoom Securities, noting that investors still want to see strong evidence of massive AI spending and growth.

“However, investors’ concerns over AI spending seemed to have already peaked following recent earnings reports by big tech companies,” he added.

Semiconductor shares were the biggest losers as Samsung Electronics tumbled 6.3 percent to 203,500 won and SK hynix plunged 10.37 percent to 1.5 million won.

SK Square, the parent of SK hynix, nosedived 13.32 percent to 970,000 won, and Samsung Electro-Mechanics, an electronics component affiliate of Samsung Electronics, slumped 9.37 percent to 1.23 million won.

Shipbuilders were weak as industry leader HD Hyundai Heavy Industries fell 0.39 percent to 507,000 won and Hanwha Ocean declined 1.31 percent to 90,700 won.

Major retailer Hyundai Department Store sank 3.36 percent to 106,400, and leading brokerage Samsung Securities dropped 2.25 percent to 95,400 won.

However, defence giant Hanwha Aerospace rose 4.67 percent to 1.05 million won, and leading pharmaceutical firm Samsung Biologics gained 1.54 percent to 1.51 million won.

The Korean won was quoted at 1,423.8 won against the U.S. dollar as of 3:30 p.m., up 0.7 won from the close of stock trading the day before.

–IANS

na/