Asian stocks plunged against a backdrop of warnings over AI financing, with South Korea's KOSPI falling below 5,500 and Japan's Nikkei 225 also suffering a sharp decline. Prolonged weakness in US semiconductor stocks and a reassessment of funding for AI investment worsened market sentiment.
The financing burden of companies investing in artificial-intelligence infrastructure shook global equity markets, triggering broad-based selling across major Asian markets. The longest consecutive decline in US semiconductor stocks since the global financial crisis weighed on sentiment, which deteriorated.
The KOSPI opened at 5,488.41, down 179.64 points from the previous session, and fell below 5,500 shortly after the open. At around 9:30 a.m., it recovered part of the decline and traded near 5,560. The KOSDAQ opened at 773.06 and traded around the 780 level.
In Japan, the Nikkei 225 fell below 64,000 shortly after the open and declined as far as 63,831, down 1,493 points, before recovering to a decline of around 1,300 points on dip-buying. The downward trend continued, although some stocks showed resilience while semiconductor-related names stood out for their declines.
Investor positioning was unsettled. Retail investors were net sellers of approximately KRW 360 billion, while foreign investors and institutions were net buyers of approximately KRW 140 billion to KRW 200 billion, respectively, supporting the index. In South Korea, selling spread to major names such as Samsung Electronics and SK Hynix, while LG Energy Solution and Samsung Biologics helped support the market.