Asia Stocks Slump as KOSPI Closes Down 3.48 Percent After Intraday 5 Percent Plunge

Updated 08:14 UTC. Seoul has closed. The KOSPI ended down 206.92 points, or 3.48 percent, at 5,730.74 on Friday, October 30, recovering part of its intraday loss after bargain hunting lifted the index from a low of 5,599.42. The closing figures replace the intraday readings in the original report below.

Foreign investors sold a net 1.62 trillion won of KOSPI shares, while institutions bought a net 742.55 billion won and individual investors bought a net 620.97 billion won, Yonhap reported. Samsung Electronics closed at 225,000 won, down 3.02 percent, and SK hynix closed at 1,418,000 won, down 7.08 percent. The KOSDAQ index fell 28.85 points, or 3.83 percent, to 724.38. Trade volume on the KOSPI was 212.76 million shares worth 19.27 trillion won, with 655 decliners against 232 advancers, and the won strengthened 5.2 won to 1,334.3 against the dollar as of 3:30 p.m. local time. Elsewhere in Asia, Japan's Nikkei 225 closed down 1.88 percent and Taiwan's TAIEX fell 3.19 percent, CNBC TV18 reported.

Tech shares slumped across Asia on Friday, October 30, and South Korea's KOSPI fell 5 percent in intraday trade as investors moved to safety over worries that huge and rising spending on artificial intelligence may not deliver sufficient returns. Reuters reported the yen rose, bonds surged toward their biggest monthly gain in nearly three years, Japan's Nikkei fell 3 percent, and the KOSPI headed for an October fall of more than 17 percent.

The benchmark KOSPI was down 314.58 points, or 5.3 percent, at 5,623.08 as of 0217 GMT on Friday, Reuters reported in its South Korea markets roundup. Yonhap, carried by Korean Vibe, put the index down 311.84 points, or 5.25 percent, at 5,626.02 as of 11:20 a.m. local time, after it had opened 2.99 percent lower. The readings differ because they were taken at different times. The figures in this original report are intraday readings, taken before the close; the closing figures are in the update above.

A trading curb in Seoul

The fall triggered a trading curb. The Korea Exchange triggered a sell side sidecar to suspend program trading for KOSPI listed shares for five minutes shortly after 10 a.m. local time, Yonhap reported. Korea JoongAng Daily put the suspension at 10:04 a.m., the first activation in 11 trading days. A sell side sidecar triggers when the KOSPI 200 futures index falls 5 percent or more for at least one minute.

At the time of the activation, the KOSPI 200 futures index stood at 887.92, down 47.92 points, or 5.12 percent, Money Today reported. Samsung Electronics was down 11,750 won, or 5.06 percent, at 220,250 won, and SK hynix fell 128,000 won, or 8.45 percent, at 1,397,000 won. Korea JoongAng Daily said the index had fallen 277.75 points, or 4.68 percent, at 5,661.7 as of 10:06 a.m., under pressure from overnight losses on Wall Street and renewed concerns over the sustainability of the AI boom.

The Wall Street trigger

The selling followed heavy losses for large United States tech companies. Shares in Google parent Alphabet fell 12.6 percent on Wall Street and slid a little further after hours, wiping out about 500 billion dollars in market value, as massive AI spending turned the company's cash flow negative, Reuters reported. An aftermarket plunge of 23 percent in Intel shares and a drop of 7 percent in Amazon shares drove Nasdaq 100 futures down 1.4 percent and sent chipmaker stocks around Asia into a tailspin.

In China, the blue chip CSI300 headed for its largest monthly fall in a decade, after nearly four months of AI stocks falling on fears that slower demand for chips and data centre equipment could crush revenues, Reuters reported. The Hindu BusinessLine put the KOSPI down 5.13 percent and the Nikkei down 2.87 percent on Friday, with Bitcoin below 79,000 dollars.

Bonds moved the other way

Benchmark 10 year United States Treasury yields fell by more than 7 basis points in Tokyo trade on Friday to 4.91 percent, a fall of about 37 basis points through October and the largest one month drop since December 2023, Reuters reported. The United States Federal Reserve kept rates on hold on Wednesday, and the Bank of Japan was expected to leave rates on hold later on Friday.