Seoul shares dip nearly 6 percent on extended chip rout amid AI skepticism

Seoul shares plunged by nearly 6 percent Wednesday following a nearly 11 percent crash the previous session as investors dumped semiconductor stocks as skepticism over whether massive spending on AI will generate sufficient returns grows.

The local currency strengthened against the dollar.

The benchmark Kospi lost 360.42 points, or 5.98 percent, to close at 5,663.24, after plunging to an intraday low of 5,262.77.

After opening 1.09 percent higher, the Kospi reversed course and tumbled by up to nearly 12 percent in afternoon trading.

At 12:31 p.m., the Korea Exchange activated a marketwide circuit breaker, halting trading in Kospi-listed stocks for 20 minutes.

The broad-based sell-off came amid growing concerns over whether hefty AI-related investments by major technology companies could generate sufficient returns to justify their lofty market valuations.

The local currency strengthened by 15.8 won from the previous session to trade at 1,446.70 against the greenback at 3:30 p.m. 

Yonhap