The KOSPI stood at 5,353.48 as of 9:40 a.m., down 3.26 percent from previous close of 5,533.77. The index opened 2.36 percent lower at 5,403.17 before extending its decline.
The junior KOSDAQ dropped 3.45 percent to 737.76, extending losses across both markets.
Foreign investors sold a net 256.5 billion won ($193.6 million) of KOSPI shares, while institutions bought a net 291.6 billion won ($220.0 million). Retail investors sold a net 9.9 billion won ($7.5 million).
The selling was concentrated in technology shares. Samsung Electronics fell 2.91 percent to 208,250 won, while SK hynix declined 1.47 percent to 1,205,000 won. Samsung Electro-Mechanics tumbled 6.38 percent to 1,072,000 won, while Samsung Electronics' preferred shares lost 2.57 percent to 162,800 won.
Shares of SK hynix fell despite announcing before Friday's market open that it had dropped plans for a potential initial public offering (IPO) of its U.S. subsidiary Solidigm, which could ease concerns over shareholder value dilution.
Other technology and battery stocks also weakened. Samsung SDI dropped 4.20 percent to 490,500 won, LG Energy Solution fell 2.95 percent to 378,500 won and SK Square slipped 1.86 percent to 737,000 won. Bucking the decline, Samsung E&A jumped 7.40 percent to 59,500 won.
The downturn followed a sharp selloff on Wall Street overnight as investors questioned whether massive AI infrastructure spending would generate sufficient returns.
The Nasdaq Composite plunged 2.60 percent, its steepest daily decline since June, while the S&P 500 lost 1.21 percent. The Dow Jones Industrial Average edged up 0.02 percent. Semiconductor stocks were among the hardest hit. The Philadelphia Semiconductor Index sank 6.72 percent, with Nvidia falling 4.40 percent, Micron Technology losing 6.26 percent and Intel sliding 8.04 percent.
Concerns over AI spending intensified after Meta Platforms reported a $2.12 billion free cash flow deficit in the third quarter, despite a 26 percent increase in revenue.
The company also raised the lower end of its 2026 capital spending forecast to $135 billion from $130 billion, while keeping the upper end at $145 billion, adding to concerns over the rising cost of AI infrastructure.
Adding to the pressure, Brent crude futures surged 4.00 percent to $113.17 a barrel overnight, their highest level since May.
The Korean won meanwhile weakened to 1,325.20 per U.S. dollar from the previous session's 1,324.20.
Copyright ⓒ Aju Press All rights reserved.
