South Korean shares fall nearly 3% as AI concerns hit chipmakers

By Reuters News

- Round-up of South Korean financial markets:


** South Korean shares slumped nearly 3% on Tuesday as chipmakers dropped on concerns over AI investment, while political instability in France dampened risk appetite across global financial markets.

** The benchmark KOSPI .KS11 was down 170.63 points, or 2.96%, at 5,597.38 as of 0132 GMT, after rebounding for two consecutive sessions from a recent six-month low.

** "Although it is confirmed that recent losses in AI chip stocks were excessive in the short term, credit risks of AI investments have not been resolved," said Seo Sang-young, an analyst at Mirae Asset Securities.

** French markets tumbled on Monday, with bonds, Paris-listed stocks and even the euro falling after widespread protests across France underscored difficulties the government faces in reducing its large deficit.

** The turmoil in the euro zone's second-largest economy has also been partly responsible for keeping the European equities stuck within a narrow range over the past month.

** "It is difficult to determine the sustainability of the recent rebound amid pressure from Europe's financial instability and higher bond yields," Seo said.

** South Korean chipmaker Samsung Electronics 005930.KS fell 1.61% on Tuesday, while peer SK Hynix 000660.KS lost 4.62%.

** AI infrastructure company Elice Group 0158S0.KQ opened 16% below its IPO price in its market debut, reflecting broader concerns over AI investment.

** Among other index heavyweights, battery maker LG Energy Solution 373220.KS slid 2.08%, while Hyundai Motor 005380.KS and sister automaker Kia Corp 000270.KS were down 3.37% and 3.02%, respectively.

** Steelmaker POSCO Holdings 005490.KS shed 2.23%, while drugmaker Samsung BioLogics 207940.KS fell 0.63%.

** Of the total 913 traded issues, only 95 shares advanced, while 803 declined.

** Foreigners were net sellers of shares worth 480.0 billion won ($361.41 million).

** The won was quoted at 1,327.8 per dollar on the onshore settlement platform , 0.40% higher than its previous close at 1,333.1.

** In money and debt markets, December futures on three-year treasury bonds gained 0.01 point to 102.93.

** The most liquid three-year Korean treasury bond yield rose 0.2 basis points to 3.882%, while the benchmark 10-year yield rose by 6.6 basis points to 4.220%.


($1 = 1,328.1400 won)

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