South Korea's KOSPI slides 8.5% below 5,000 after AI and chip sell‑off

What Happened

South Korea's benchmark KOSPI index fell 8.5% in early trade on Friday, November 6, slipping below the 5,000 level and triggering the market’s first 8% circuit‑breaker, which halted trading for 20 minutes. The index briefly dropped as much as 8.8% before clawing back some loss.

Reaction

The plunge followed a global rout that saw the Nasdaq 100 tumble 6.4% and erase a record $2.3 trillion in market value. Wall Street’s sharp sell‑off in artificial‑intelligence and semiconductor stocks dragged South Korean shares, especially Samsung Electronics and SK Hynix, each down more than 11% before partially recovering. Ponmudi R, CEO of Enrich Money, said the Dow fell 3.45%, the S&P 500 4.36% and the Nasdaq Composite 5.52%, highlighting a broad risk‑off mood. South Korea’s Finance Ministry warned it will monitor developments and act to curb excessive volatility.

Context

The KOSPI had surged past 9,000 in the summer on AI‑driven optimism, making the market one of the world’s best performers. Concerns over slower AI‑infrastructure spending and a U.S. Congress controlled by Democrats raised fears of tighter AI rules, sparking the reversal that now sees the index well below President Lee Jae Myung’s 2025 target.