HONG KONG (AP) — South Korea’s Kospi index plunged more than 10% on Tuesday on heavy selling of chipmaking stocks that have gyrated recently due to concerns over the sustainability of the boom in artificial intelligence.
Oil prices fell more than 1%, while U.S. futures were little changed.
Trading was temporarily halted as Kospi dropped to its lowest level since April as shares in chipmakers Samsung Electronics and SK Hynix dropped sharply. The Kospi was down 10.5% at 6,051.19 by midday.
Samsung’s shares tumbled 12% while those for SK Hynix were down 12.7%.
A big factor driving the selling of AI-related shares, analysts said, is the expectation that competition from Chinese AI startup s and chipmakers might undermine gains for global companies whose shares have skyrocketed due to the AI frenzy.
A 466% jump in the price of Chinese chipmaker CXM T in its trading debut Monday has underscored such concerns. CXMT raised at least $8.6 billion in its initial public offering on Shanghai’s tech-oriented STAR exchange.
Most other Asian markets also fell, with Tokyo’s Nikkei 225 down 4% at 62,350.18. The Taiex in Taiwan skidded 3.9%.
Hong Kong’s Hang Seng edged 0.1% lower, to 25,178.21, while the Shanghai Composite index lost 1% to 3,820.52.
In Australia, the S&P/ASX 200 balked the regional trend, gaining 0.6% to 8,944.40.
Oil prices extended their declines as U.S. and Iran refrained from attacks for a third straight day.
Officials in the Middle East said mediators had made progress in getting the two sides back to negotiations.
Brent crude, the international standard, fell 0.8% to $85.16 a barrel.
U.S. benchmark crude oil lost 0.9% to $81.86 a barrel.
Stocks on Wall Street drifted to a mixed close Monday.
The S&P 500 rose less than 0.1% and the Dow Jones Industrial Average rose 0.5%. The Nasdaq composite fell 0.2% for its fourth straight loss.
