Kospi closes down 5.46% as chip stocks slide and foreign investors sell
Key Facts
South Korea's Kospi closed down 5.46% at 6,035.35 points, according to Aju Press, in a session marked by sharp losses in memory chip stocks. The index pared losses exceeding 7% during trading, according to Investing.com, as pressure on the U.S. semiconductor sector spread to the Korean market. During the session, the index fell below 6,000 points, a level it had not breached since July 31, according to South Korean broadcaster SBS. It then ended trading above that level after recovering some of its intraday losses. The selloff coincided with reports of technological advances by a Chinese rival in the memory industry and concerns over the sustainability of AI funding.
Foreign investors' net selling in the Korean session totalled 4.53 trillion won, according to Aju Press, extending a decline that had begun before the day's trading. In the previous session, on October 12, 2026, the Kospi lost 3.65%, according to historical trading data published by Investing.com. The latest session's loss was therefore steeper than the previous day's decline, even after the index pared its intraday drop. Reuters placed these moves in a broader context, saying the Kospi was experiencing its "longest losing streak in more than two years". It added that the index had fallen by about a quarter from its July peaks, placing the latest selloff within the losses accumulated since those highs.
Among Korean memory chipmakers, Samsung shares fell more than 7% during the session, according to Reuters coverage, as the sector came under pressure from Chinese competition. SK Hynix shares posted a steeper loss, falling more than 10% in the same session, according to the agency. The declines in both companies coincided with news of technological advances at China's ChangXin Memory Technologies, according to SBS. The broadcaster said the reports concerned fresh progress by the company in dynamic random access memory technology, the focus of the news that accompanied the decline in U.S. chip stocks. Concerns over the Chinese competitor thus centred on memory technology as Korean producers' shares recorded these sharp losses.
The decline in Korean stocks followed a 2.67% drop in the Philadelphia Semiconductor Index in the previous U.S. session, according to SBS. U.S. chip stocks had been sold off alongside reports of advances by the Chinese memory company. Alongside the competition news, Investing.com's coverage pointed to additional pressure from investor concerns about AI funding. The website said "broader investor concerns about the sustainability of AI funding also weighed on the sector". Concerns over Chinese technological advances and AI funding thus formed the backdrop to a selloff that spread from U.S. chip stocks to memory chipmakers in South Korea.
Elsewhere in Asia, Japan's Nikkei lost 1.9% in the trading snapshot published by Investing.com during its coverage of the session. The Japanese market's decline coincided with the Korean selloff, which had exceeded its closing decline during trading hours. In the background, crude oil prices had risen above $106 a barrel on the Monday before the Korean session, according to Reuters. The rise in crude thus preceded the latest selloff in Korean stocks, alongside the decline in U.S. semiconductor shares. The period combined rising oil prices with losses in Asian equity markets, while chipmakers also faced pressure related to competition and AI funding.
Investors are looking to Wednesday's U.S. consumer price report, which Investing.com listed among the next events markets are watching. The report is due after the Korean selloff and following the rise in oil prices recorded on Monday. Investors are also awaiting the latest U.S. corporate earnings season, according to Reuters coverage of concerns surrounding chip and AI stocks. The agency described the earnings season as "a gauge of the state of the AI boom", as companies prepared to report their business performance. This focus on earnings follows pressure on the chip sector over concerns about the sustainability of funding, while Wednesday's U.S. inflation report represents the next dated event on the watchlist.