Markets
Seoul's Kospi Fell 7.6% and Tripped a Circuit Breaker. The Nikkei Lost 4.9%
South Korea's Kospi closed at 5,554.22 on October 15, down 7.57% and at its lowest since April, after a 20-minute trading halt. Japan's Nikkei fell 4.90% and Taiwan's Taiex 3.41% as the global chip sell-off reached Asia.
It was a brutal session across Asia on October 15. The Kospi fell 7.57% to 5,554.22, its seventh consecutive loss and lowest close since April 7. During the morning the index was down as much as 8%, which triggered South Korea's first-level circuit breaker and halted trading for 20 minutes. Japan's Nikkei 225 fell 4.90% to 64,425.9, and Taiwan's Taiex dropped 3.41% to 46,969.9, with TSMC down 2.01% in Taipei despite reporting a record quarter that day.
The trigger was the same one that hit Wall Street on Wednesday: a hotter-than-expected US inflation report that raised the odds of another Fed rate hike, combined with growing doubts about how the AI build-out is being financed after CoreWeave's 15% fall. Memory-chip makers, which have led the Korean market higher all year, led it lower. One report also cited concern about Chinese memory-chip oversupply, though that was not widely confirmed.
Foreign investors did the selling. According to Invezz, they sold about $1.8 billion of Korean shares on Thursday morning alone and more than $10 billion so far in October. Korea's market is among the most exposed in the world to the semiconductor cycle, and foreign flows tend to amplify every turn in it.
The rebound came quickly. On Friday morning the Kospi rose 2.48% to 5,692.04, the Nikkei 1.56% and the Taiex 0.30%, after US stocks recovered overnight. Whether that holds depends less on Asia than on whether US chip stocks can end their eight-day losing streak.
A 7.6% daily drop with a trading halt is rare for a developed market. The Kospi had been one of the strongest markets in the world this year on AI-related chip demand; moves of that size on the way up tend to be paid back in bursts like this one on the way down.