Seoul shares nosedive nearly 6 pc on profit hunting after AI-led rallies

Seoul, June 26 (IANS) South Korean stocks tumbled nearly 6 per cent on Friday as investors locked in profits after recent rallies driven by stocks related to artificial intelligence (AI). The Korean won gained against the US dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) lost 519.09 points, or 5.81 percent, to close at 8,411.21, after falling as low as 8,126.84, reports Yonhap news agency.

The market rout came after the KOSPI rallied by 5.42 percent gain on Thursday and racked up a 3.26 percent rise on Wednesday.

The index opened 1.31 percent lower and extended its losses to decline more than 8 percent, inciting the bourse operator to activate a circuit breaker at 12:10 p.m. and halt trading of KOSPI shares for 20 minutes.

Overnight on Wall Street, tech heavyweights finished mixed as Micron Technology jumped 15.7 percent on strong earnings, while Apple dropped 6.1 percent after the company hiked prices on many of its products due to expensive memory chips.

Trade volume was heavy at 508.9 million shares worth 51.5 trillion won (US$33.5 billion), with decliners sharply outnumbering gainers 777 to 111.

Foreigners and institutions sold a net 4.6 trillion won and 3.8 trillion won worth of shares, respectively, while individuals scooped up a net 8.2 trillion won.

“Investors are worried that too expensive memory chips would raise prices of end-use products and undermine demand for memory chips, and that would discourage tech companies from increasing large-scale AI investment,” said Han Ji-young, an analyst from Kiwoom Securities.

Semiconductor shares were the biggest losers. Samsung Electronics, the world’s largest memory chipmaker, tumbled 5.3 percent to 339,500 won and runner-up SK hynix slumped 8.36 percent to 2.67 million won.

SK Square, the parent of SK hynix, plunged 9.43 percent to 1.72 million won, and Samsung Electro-Mechanics, an electronic-components manufacturing affiliate of Samsung Electronics, shed 0.2 percent to 1.99 million won.

Financial shares also went south as major banking group Hana Financial Group sank 3.77 percent to 109,700 won and Samsung Securities skidded 6.32 percent to 103,800 won.

The Korean won was quoted at 1,532 won per U.S. dollar as of 3:30 p.m., up 10.7 won from the previous session.

–IANS

na/