Investing.com-- South Korea's benchmark stock index plunged more than 8% on Monday, triggering a market-wide circuit breaker, as a global semiconductor selloff and escalating Middle East tensions sparked a broad flight from risk assets. The KOSPI index fell as much as 8.8% to 7,442.73 points by 00:48 GMT.Get real-time updates on market-moving news with InvestingProThe Korea Exchange halted trading in KOSPI index stocks for 20 minutes shortly after the market, activating a Level 1 circuit breaker for the second time this year.
The KOSPI was last down about 8.4%, retreating to the 7,400 level. The selloff followed a sharp decline in U.S. semiconductor stocks on Friday after investors were disappointed by forecasts from chipmaker Broadcom Inc (NASDAQ:AVGO), sending the Philadelphia Semiconductor Index down more than 10%, its steepest drop since March 2020.
South Korean chip heavyweights led losses, with Samsung Electronics (KS:005930) and SK Hynix Inc (KS:000660) falling sharply in early trade. The KOSPI has been one of the world's best-performing equity indexes this year, thanks to an artificial intelligence-driven rally in semiconductor stocks. Investor sentiment was further dented by renewed conflict in the Middle East after Iran launched missiles at Israel, adding to concerns about global growth, inflation, and energy prices.
The decline came despite fresh announcements from Nvidia (NASDAQ:NVDA) highlighting South Korea's importance in the artificial intelligence supply chain. Nvidia on Sunday unveiled partnerships with SK Hynix, Naver Corp (KS:035420), and Doosan (KS:000150) to develop AI data centres and "AI factories" in the country.
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