Seoul shares in free fall, bourse operator issues circuit breaker for Kospi

Seoul, July 29 (AHN) South Korea's bourse operator on Wednesday activated a circuit breaker for the benchmark Korea Composite Stock Price Index (KOSPI) on an extended sell-off in tech shares.

Trading of KOSPI-listed shares was halted for 20 minutes from 12:31 pm as the KOSPI plunged more than 8 per cent from the previous session's close, reports Yonhap news agency.

The benchmark index came under heavy selling pressure as investors sold off semiconductor shares on skepticism about tech giants' heavy spending on artificial intelligence (AI).

It marked the eighth time this year that the KRX has activated a circuit breaker.

Seoul shares turned lower late on Wednesday as investors dumped tech stocks amid concerns over future artificial intelligence (AI) spending.

The Korea Exchange, the country's bourse operator, activated a sell-side sidecar for the KOSPI following its sharp decline, with program trading in KOSPI-listed shares suspended for five minutes around 10:55 a.m.

On Tuesday, the index plunged 10.84 percent to close at 6,023.66, driven by rising competition from China, which led to a heavy sell-off of AI-related stocks, such as chipmakers.

The extended sell-off comes as investors question whether massive spending on AI will generate returns enough to justify tech firms' elevated valuations.

Overnight, U.S. stocks ended mixed. The Dow Jones Industrial Average gained 1.03 percent, while the tech-heavy Nasdaq composite slipped 0.22 percent.

Individuals sold a net 1.37 trillion won (US$943 million) worth of stocks, while institutions and foreigners bought a net 1.27 trillion won and 91.2 billion won, respectively.

Most shares traded in negative territory. Market bellwether Samsung Electronics plunged 5.45 percent, and SK hynix dived 10.32 percent.

Samsung Electro-Mechanics, an electronic component affiliate of Samsung Electronics, plummeted 9.07 percent, and LG Electronics sank 5.21 percent.

Internet giant Naver fell 3.1 percent, and leading mobile carrier SK Telecom shed 4.99 percent.

Among gainers, tobacco company KT&G rose 2.04 percent and Samyang Foods jumped 7.86 percent.

—AHN

na/