South Korean stocks plunge as AI-driven chip rally unwinds
South Korean stocks fell sharply, erasing gains built up during an AI-driven rally as a selloff in chipmaker shares deepened. The decline hit semiconductor-heavy benchmarks particularly hard, reflecting growing investor caution around AI-related valuations. The drop adds to a volatile stretch for Asian equity markets this week.
South Korean stocks fell sharply on Wednesday, erasing gains accumulated during a rally driven by artificial-intelligence optimism, as a selloff in semiconductor shares deepened.
The decline weighed heavily on benchmarks with large weightings in chipmakers, reflecting growing investor caution over how far AI-related valuations had run ahead of underlying earnings. The selloff extended a volatile stretch for South Korean equities, which had outperformed regional peers earlier this year on enthusiasm for AI infrastructure spending.
Market watchers said the pullback highlights the sensitivity of tech-heavy Asian indexes to shifts in sentiment around the AI trade, with South Korea's export-dependent chip sector particularly exposed to swings in global demand expectations.
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