Seoul Stocks Extend Losses Amid AI Concerns

(MENAFN- IANS) Seoul, Oct 20 (IANS) Seoul stocks were trading sharply lower late on Tuesday morning as concerns over investments in the artificial intelligence (AI) value chain sparked a sell-off in major chip shares.

The benchmark Korea Composite Stock Price Index (KOSPI) fell 136.06 points, or 2.36 percent, to 5,631.95 as of 11:20 am, reports Yonhap news agency.

After opening 0.6 percent lower, the index extended its losses to an intraday low of 5,493.24, before recovering some ground.

Overnight, U.S. stocks ended mixed as technology shares rebounded from their steepest weekly drop since June.

The Dow Jones Industrial Average edged down 0.07 percent, while the benchmark S&P 500 rose 0.41 percent and the tech-heavy Nasdaq Composite Index gained 1.11 percent to finish at 26,430.89.

In Seoul, tech stocks led the decline. Chipmakers Samsung Electronics Co. and SK hynix Inc. fell 1.03 percent and 2.74 percent, respectively.

In contrast, Samsung Electro-Mechanics Co., an electronics components affiliate of Samsung Electronics, gained 2.48 percent after opening lower.

The Korean won was trading at 1,327.6 won against the U.S. dollar as of 11:20 a.m., up 5.5 won from the previous session's close.

On Monday, Seoul shares ended higher, supported by institutional buying, as investors weighed concerns over whether heavy spending on artificial intelligence (AI) infrastructure would generate sufficient returns.

After opening 3.17 percent lower, the benchmark Korea Composite Stock Price Index (KOSPI) reversed course to close up 99.96 points, or 1.76 percent, to 5,768.01, after falling as low as 5,488.41.

Institutions bought a net 574.66 billion won (US$432 million) worth of shares, while foreign investors and retail investors sold a net 37.87 billion won and 1.09 trillion won, respectively.

Investors also remained cautious ahead of earnings reports due this week from major companies, including Tesla and Meta Platforms, as well as the Nov. 3 U.S. midterm elections, amid continued uncertainty over the outlook for interest rates, analysts said.

-IANS

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