Kospi closes down 3.26% on talks of AI development slowdown, Hormuz tension
The main bourse ended the day 225.54 points down at 6,684.37 as AI bigwigs expressed support for caution in an unusual move.
A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 6,684.37 points on Sept. 14, down 225.54 points, or 3.26 percent, from the previous trading session.
YONHAP
Stocks tumbled by more than 3 percent Monday as investors sold off tech heavyweights on persisting geopolitical uncertainties and warnings from U.S. tech executives that the pace of AI development may be too fast. The local currency weakened against the dollar.
After opening sharply lower, the benchmark Kospi closed down 225.54 points, or 3.26 percent, to 6,684.37.
Trade volume was light at 274.4 million shares worth 20.19 trillion won ($14.93 billion). Losers outnumbered winners 561 to 308.
Retail investors were net buyers, snapping up 2.97 trillion won. Institutional and foreign investors offloaded a combined net 4.46 trillion won.
"The main factor that led the sharp decline was the controversy over the pace of AI development," said Lee Kyoung-min, an analyst from Daishin Securities.
An anticipated meeting expected to reopen transit in the Hormuz Strait was postponed, which led Brent crude, the international oil benchmark, to hover above $108 per barrel, further cooling investor sentiment, the analyst added.
Over the weekend, Anthropic co-founder Dario Amodei issued a proposal to slow down the advancement of AI to ensure public safety, with a rare show of unity from other AI executives from the United States following.
In Seoul, most market heavyweights ended lower.
Samsung Electronics shed 4.05 percent to 249,000 won, and SK hynix retreated 6.35 percent to 1.7 million won. LG Energy Solution dipped 2.36 percent to 351,500 won, Hyundai Motor slid 2.88 percent to 371,500 won, and Hanwha Aerospace jumped 5.18 percent to 1.14 million won.
Financial stocks strengthened on anticipation that the central banks in Korea and the United States will maintain a monetary tightening stance for a longer-than-expected period.
KB Financial added 2.08 percent to 181,600 won, and Shinhan Holdings inched up 1.51 percent to 114,600 won.
The local currency weakened 1.4 won from the previous session to trade at 1,347.3 against the greenback at 3:30 p.m.
Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys rose 1.1 basis points to 4.025 percent, and the return on the benchmark five-year government bonds added 1.2 basis points to 4.279 percent.
Yonhap
