The benchmark KOSPI fell as much as 5.9% in morning trade, after dropping 3.7% on Friday, and was set to post its worst session since March 2020.
The fall, which triggered a sidecar trading curb on the KOSPI for the first time since 2020, was in line with the broader Asian market’s weakness, with the MSCI Asia Pacific ex-Japan Index down 2.5% and Japan’s Nikkei falling 4.6%.
Chip heavyweights Samsung Electronics and SK Hynix dropped more than 7%, tracking steep declines in the Philadelphia Semiconductor Index, which had driven Wall Street’s rally on optimism around artificial intelligence.
The KOSPI was down more than 11% from a six-month peak of 2,860.42 hit in July.”The market has entered territory of extreme fear amid a slump in U.S. big tech stocks, worries about a slowing U.S. economy and sharp declines in Asian markets,” said Kim Dae-jun, analyst, Korea Investment Securities.Earlier in the day, South Korean authorities issued several comments to calm investor sentiment, with the finance minister vowing to respond to heightened market volatility according to a contingency plan.The U.S. stock futures fell more than 1% in Asian trading hours on Monday, after heavy sell-off last Friday that confirmed the Nasdaq was in correction territory.
The U.S. unemployment rate jumped to near a three-year high, data showed on Friday, heightening fears the labour market was deteriorating and potentially making the economy vulnerable to recession.
The South Korean won currency weakened on Monday, after hitting a more than two-month high of 1,356.0 per dollar on Friday, as foreigners sold local stocks worth more than 1 trillion won ($735.76 million)
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