South Korea’s Kospi index sinks more than 10% on heavy selling of chipmaking stocks

HONG KONG (AP) — South Korea’s Kospi index plunged more than 10% on Tuesday on heavy selling of chipmaking stocks that have gyrated recently due to concerns over the sustainability of the boom in artificial intelligence.

The Kospi dropped to its lowest level since April as shares in chipmakers Samsung Electronics and SK Hynix dropped sharply.

Most other Asian markets also fell, with Tokyo’s Nikkei 225 down 3% and the Taiex in Taiwan falling 3.8%. Oil prices fell more than 1%, while U.S. futures were little changed.

One factor driving the selling of AI-related shares is the expectation that competition from Chinese AI startups and chipmakers might undermine gains for global companies whose shares have skyrocketed due to the AI frenzy.

A 466% jump in the price of Chinese chipmaker CXMT in its trading debut Monday has underscored such concerns. CXMT raised at least $8.6 billion in its initial public offering on Shanghai’s tech-oriented STAR exchange.

“The market’s concern lies ​less ⁠in CXMT’s current earnings and more in its potential for accelerated capacity expansion to rival Korean ⁠companies ​and technology development following its ​IPO,” said Kim Seok-hwan, a Seoul-based market analyst at Mirae Asset ​Securities.

Brought to you by www.srnnews.com

Click here to read the full article