KOSPI Falls 8.76% to 4,911.91 Points; Trading Halted for 20 Minutes
Key Facts
South Korea’s KOSPI fell 8.76% to 4,911.91 points by 9:03 a.m. in the November 6 session, down 471.89 points from the previous session’s close, according to a report by SBS. The decline crossed the threshold for a 20-minute halt in KOSPI stock trading, which began at 9:03:34 a.m. Automated sell mechanisms were also triggered in the KOSPI and KOSDAQ markets during the session, according to a separate report by the network. The moves came as selling in Korean stocks broadened, amid investor concerns about the impact of a possible tightening of US rules on AI investments. The figures put the index’s losses at the center of the session’s developments, after it began with a narrower decline.
The KOSPI opened the session at 5,263.26 points, down 120.54 points, or 2.24%, from the previous day’s close, before losses accelerated to 8.76% by 9:03 a.m. The trajectory shows that the sell-off deepened in the first minutes of trading, reaching the level that prompted a temporary halt in stock trading. The halt lasted 20 minutes from 9:03:34 a.m., according to SBS. The decline recorded at 9:03 had reached 471.89 points, taking the index to 4,911.91 points. This coincided with the activation of automated sell mechanisms in the two main Korean stock markets.
An SBS report linked the pressure to concerns that the United States could tighten regulations on the construction of AI data centers. The report said that, after its landslide victory in the US midterm elections, the Democratic Party is moving toward imposing stricter restrictions on these centers because of their heavy energy consumption and environmental concerns, marking a shift from the Trump administration’s approach. The concerns extend to South Korea’s semiconductor market, as restrictions on AI infrastructure investment could weaken demand for chips. A KBS report linked losses in the November 5 session to similar concerns that a Democratic victory would give the party control of both chambers of Congress and lead to restrictions on AI infrastructure investment. The sell-off included semiconductor and power equipment stocks, according to SBS.
An SBS report addressed the concentration of pressure in stocks tied to AI infrastructure components, amid market concerns about the potential impact of regulation on data-center construction plans. It also noted that the sell-off was not limited to chipmakers but had spread to power equipment companies, reflecting the broader reach of concerns over data centers’ energy consumption. The concerns focused on the possibility of reduced investment in those centers and what that could mean for South Korean semiconductor suppliers. A researcher at IM Securities said a slight decline in data-center spending alone was unlikely to cause a sharp collapse in overall demand for GPUs and South Korean semiconductors. The researcher added that GPUs are "already in short supply," noting that the likelihood of demand falling sharply solely because spending declines slightly remains low.
The SBS report distinguishes between the automated sell mechanisms triggered in the two markets and the trading halt imposed by the circuit breaker on KOSPI stocks for 20 minutes. The report said automated sell mechanisms were activated in the KOSPI and KOSDAQ, while the other report specified that KOSPI trading was halted at 9:03:34 a.m. The halt came after the index fell to 4,911.91 points, down 8.76% from the previous session. Losses began with an opening at 5,263.26 points, down 2.24% from the previous close, and then widened during the session. Concerns about possible US restrictions on AI data centers remain a key factor in explaining the sell-off in chips and power equipment.