ALBAWABA - The South Korean Stock Market (Kospi) suffered one of the worst plunges in its history after a two-year rally, the culprit is AI and tech investors pulling out.
After a two-year rally where tech companies hit record highs; the party came to an end on Wednesday as South Korean stocks plunged historically after a slow blood-letting battered chip firms over the past month, deepening as skittish investors withdrew their bets on the AI boom.
Citing the unreal sums being pumped into the tech sector as the main cause behind the pull, investors point to the trend of tech firms having low cashflow but unrealistically high market values, inciting fears of solvency issues in case of a later pull out.
Kospi plunged more than 12 percent at one point to extend Tuesday’s near-11 percent collapse with chip makers bearing the brunt of the plunge; namely SK hynix and Samsung.
SK hynix had the air blown out from under them, falling nearly 20 percent on Wednesday after dropping more than 14 percent on Tuesday, marking a 50 percent decrease from its all-time high just a month ago. With Samsung also suffering a 12 percent drop.
Beyond Seoul, Tokyo was also hit, diving three percent as chip firms Kioxia and Tokyo Electron both plunged 12 and 13 percent respectively.
In Taipei, the market dropped five percent as heavyweight chipmaker TSMC fell four percent.
While Shanghai and Jakarta also fell, the rest of Asia enjoyed gains; Hong Kong was up more than one percent and Sydney, Singapore, Wellington, Manila and Mumbai were also up.
