Kospi plunges over 4% on an AI shock, rising Iran war tensions
The Kospi plunged 304.33 points to close at 6,516.27 points after a Chinese AI model threw the massive capital spending from hyperscalers in question.
A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 6,516.27 points on July 20, down 304.33 points, or 4.46 percent, from the previous trading session.
YONHAP
Stocks closed more than 4 percent lower Monday, as AI woes resurfaced amid escalating tensions from the Iran war. The local currency strengthened against the dollar.
The Kospi plunged 304.33 points, or 4.46 percent, to 6,516.27 points, after falling as low as 6,472.80.
Trade volume was moderate at 339.5 million shares worth 28.4 trillion won ($19.2 billion). Losers far outnumbered winners 796 to 97.
Institutional investors were net sellers, offloading 919.1 billion won. Foreigners and retail investors snapped up a combined net 864.4 billion won.
"Unfavorable factors related to semiconductors and worsening conflict risks between the United States and Iran dampened investor sentiment," said Lee Kyoung-min, an analyst at Daishin Securities.
On Friday, U.S. stocks closed lower, weighed down by a decline in semiconductors, as the latest AI model unveiled by Chinese startup Moonshot renewed concerns over global spending on AI infrastructure, including semiconductors.
The model, called Kimi K3 and unveiled Friday, is considered to deliver a performance approaching most advanced AI models from the U.S. firms OpenAI and Anthropic, at a much lower cost.
This raised speculation over whether the massive capital spending from hyperscalers could be justified, adding downward pressure to the stock market, the analyst added.
Also weighing on the Kospi were escalating tensions in the Middle East, after the U.S. military announced a third U.S. soldier died in Iraq during back-and-forth attacks between the United States and Iran.
Most shares closed lower.
Samsung Electronics dipped 4.31 percent to 244,000 won, while its rival SK hynix shed 4.23 percent to 1,764,000 won.
AI infrastructure-related shares also lost ground on reemerging concerns over the sector.
LS Electric lost 5.63 percent to 179,300 won, and Hyosung Heavy Industries fell 8.96 percent to 2,539,000 won.
Among the winners were Shipper HMM, which inched up 0.1 percent to 20,150 won, and refiner S-Oil, which added 1.24 percent to 146,700 won.
The local currency strengthened by 0.1 won from the previous trading session on Friday to trade at 1,478.4 won against the greenback at 3:30 p.m.
Yonhap
