South Korea's KOSPI Index Falls Below 5,000
South Korea's benchmark KOSPI index fell by 8.8% on November 6, 2026. This drop brought the index below the 5,000 mark for the first time since President Lee Jae Myung set that target in 2025. The decline led to a 20-minute trading halt on the Korea Exchange after the index hit its first 8% circuit breaker shortly after the market opened.
The KOSPI's decline followed a major selloff in artificial intelligence (AI) and semiconductor stocks on Wall Street. The Nasdaq 100 dropped 6.4%, wiping out $2.3 trillion in market value. South Korean stocks, which depend heavily on semiconductor giants like Samsung Electronics and SK Hynix, were hit hard. Both companies saw their shares fall more than 11% in early trading but later recovered some losses.
Concerns about a possible slowdown in AI infrastructure spending have affected investor sentiment. There are also fears that the recent Democratic Party win in the U.S. Congress could lead to stricter regulations on AI. The KOSPI had previously surged past 9,000 earlier in the summer, fueled by optimism about AI and strong performances from chipmakers. However, the current downturn shows a sharp change in market sentiment.
Other Asian Markets Also Decline
Japan's Nikkei 225 index also faced pressure, falling by 7.1% to 56,745.81. This drop put the index in bear market territory after it lost 20% from its peak in June. Other Asian markets, including Taiwan's Taiex, showed similar declines, with many chip-heavy indices experiencing significant losses.
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The steep declines in the KOSPI and Nikkei are likely to hurt investor confidence in technology and semiconductor sectors across Asia. This may lead to increased volatility in related stocks. The situation could also prompt more scrutiny of AI-related investments and the impact of regulations on growth.
Investors should watch for upcoming earnings reports from major semiconductor companies. These reports could provide insights into the sector's performance amid these market challenges.
Based on reporting by: moneycontrol.com