According to Reuters and the Nihon Keizai Shimbun (Nikkei), major Asian markets showed substantial losses from the start of trading. As of 10:28 a.m., the KOSPI index had fallen by more than 8%, triggering the first stage of a circuit breaker at 9:03 a.m. Reuters reported that the KOSPI was down approximately 17% from its record high set the previous week. Samsung Electronics saw a decline of about 9%, while SK Hynix dropped nearly 6%, leading the downturn among semiconductor and AI-related stocks that had previously driven market gains.
Earlier, the Korea Exchange activated a sell-side circuit breaker for the KOSPI at around 9:34 a.m. This measure is triggered when the KOSPI 200 futures price falls by more than 5% compared to the previous trading day for one minute, halting program sell orders for five minutes. At the time of the circuit breaker activation, KOSPI 200 futures were down 6.26% at 1216.85.
The sharp decline was directly influenced by a significant drop in AI and semiconductor stocks on U.S. markets over the weekend. The tech-heavy Nasdaq index fell by 4.2%, while the Philadelphia Semiconductor Index (SOX) plummeted by 10%. Additionally, strong U.S. employment data raised concerns about potential interest rate hikes by the Federal Reserve, compounded by ongoing uncertainties surrounding the U.S.-Iran ceasefire.
Furthermore, the anticipated SpaceX IPO this week is seen as an additional burden on the market. SpaceX is expected to finalize its offering price and begin trading this week, with the possibility of subsequent large-scale IPOs from companies like Anthropic and OpenAI, raising concerns that significant capital raises could absorb liquidity from other assets.
Japan's stock market also faced steep declines, with the Nikkei 225 index dropping 4.4% from the start of trading. AI and semiconductor stocks, which had previously driven market gains, were particularly affected, with sell orders concentrated on companies like Advantest, Tokyo Electron, and SoftBank Group.
Taiwan's TAIEX index fell by 5%, while Chinese and Hong Kong markets also experienced declines of 1% to 2%.
Bob Savidge, head of macro strategy at BNY, told Reuters, "The narrative that 'AI drives everything' has been shaken. The key question remains whether this correction is a healthy pause after a nine-week stock rally or if it marks a peak."
* This article has been translated by AI.
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