Korean stocks retreated on Friday as heavyweight chipmakers declined, tracking an overnight US technology selloff. The Kospi index slid up to 3.1%, extending losses for a fourth weekly decline. Samsung Electronics Co. and SK Hynix Inc. both dropped over 2% in early trading.
Japan's Nikkei 225 also fell up to 0.6%. Korean stocks have come under pressure amid concerns over the sustainability of massive AI-related investment and the prospect of higher borrowing costs. The benchmark index has fallen about 20% this month, making it the world's worst-performing major stock market in October.
This highlights heavy exposure to AI-linked shares and volatile investor sentiment. "Investors are increasingly questioning how quickly massive AI spending will translate into sustainable cash flows, while higher oil prices add another layer of uncertainty," said Jung In Yun, CEO at Fibonacci Asset Management Global. "Sentiment looks fragile, with investors prioritizing capital preservation over buying the dip." Investor deposits at Korean brokerages have fallen below 90 trillion won ($67.9 billion) for the first time since January, implying limited retail support for the market, according to Roy Lim, an equity sales trader at Samsung Securities.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing