South Korea’s KOSPI Extends Crash, Falls 10% After SK Hynix Earnings Miss

South Korea’s stock market witnessed another sharp selloff on Wednesday as concerns over artificial intelligence (AI) investments intensified following disappointing earnings from chipmaker SK Hynix. The benchmark KOSPI index fell nearly 10%, triggering a trading suspension for the second straight session.

The index dropped below the 6,000 mark to its lowest level since early April. The latest decline followed an 11% fall on Tuesday, taking the two-day loss to more than 21%.

The KOSPI is now heading towards its worst monthly performance on record, with losses of around 35% after a strong rally earlier this year driven mainly by semiconductor giants SK Hynix and Samsung Electronics.

The back-to-back trading halts reflect growing investor concerns about the sustainability of the AI-driven market rally. The benchmark has declined nearly 40% from its peak reached a month ago as investors reassess whether massive investments in AI infrastructure will generate sufficient returns.

Shares of SK Hynix dropped around 15% after the company reported a 557% jump in quarterly profit, but the results failed to satisfy elevated market expectations. Investors had already priced in strong growth due to the global AI boom, leading to heavy selling after the earnings announcement.

Samsung Electronics, another major contributor to the KOSPI, also declined around 8% ahead of its quarterly earnings announcement. The two companies together have significant weight in the benchmark index, making their declines a major factor behind the broader market fall.

Adding to market pressure was a sharp rise in crude oil prices. Brent crude climbed more than 4% to above $88 per barrel after the United States reported intercepting an Iranian attack on its forces and launching retaliatory strikes.

The broader South Korean market also faced pressure, with the KOSDAQ index, which tracks small and mid-sized companies, falling more than 8%. The decline triggered a 20-minute trading halt.

Market volatility has increased significantly, with nine of the 15 circuit breakers activated on the KOSPI since 2000 occurring this year, highlighting the severity of the ongoing selloff.