South Korea's benchmark KOSPI index plunged in early trading Monday amid renewed concerns over an artificial intelligence industry bubble and caution ahead of key U.S. economic data releases this week.
The KOSPI opened at 4,053.74, down 2.72% from the previous session. As of 9:15 a.m., the index had trimmed some losses but remained down more than 2%. Foreign and institutional investors sold a combined 390 billion won ($290 million) worth of shares, while individual investors bought approximately 400 billion won, partially cushioning the decline.
Major market-cap stocks led the selloff. Samsung Electronics (005930.KS), the market's bellwether, fell more than 3% to the low 100,000 won range. SK hynix (000660.KS) tumbled over 4%, with selling pressure concentrated across the semiconductor sector. The decline reflects concerns over potential slowdown in AI chip demand and elevated valuations.
Other major decliners included LG Energy Solution (373220.KS), down 2.02%, Samsung Biologics (207940.KS), down 0.47%, and Samsung Electronics preferred shares, down 2.84%. In the automotive sector, Hyundai Motor (005380.KS) fell 1.49% and Kia (000270.KS) dropped 0.87%. HD Hyundai Heavy Industries declined 2.62% and Hanwha Aerospace (012450.KS) lost 3.23%.
Some stocks showed limited resilience. On the KOSDAQ, Alteogen rose more than 1% in early trading on continued expectations for technology licensing deals, while ABL Bio also started slightly higher. However, upward momentum remained constrained amid the broader market weakness.
The selloff follows weakness on Wall Street driven by renewed "AI bubble" concerns. On Friday, U.S. markets fell with semiconductor stocks leading the decline. Broadcom plunged more than 13% despite reporting better-than-expected earnings, as concerns over declining order backlog and monetization weighed on sentiment. This triggered broader caution toward the AI sector, pushing all three major U.S. indices lower. The Philadelphia Semiconductor Index fell more than 5%, adding pressure on Korean chip stocks.
Korean markets are expected to remain volatile this week amid the fallout from the U.S. AI stock selloff and ahead of Micron's earnings release. "Micron's results will significantly influence not only U.S. AI-related stocks but also the direction of Korean semiconductor shares," said Han Ji-young, an analyst at Kiwoom Securities. "From mid-week onward, a wait-and-see approach is likely to dominate as investors look toward major earnings events."
