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Korean stocks drop on chip losses
The Korean stock market experienced a sharp decline due to a downturn in semiconductor manufacturing companies' shares, with the "KOSPI" index dropping by 4.8%. Shares of "SK Hynix" and "Samsung Electronics" also declined. By the end of the session, losses amounted to approximately 40% from the peak in June. The rise in U.S. Treasury yields has increased pressure on the sector, with foreign net sales totaling $480 million in the first two hours, and the ten-year bond yields rising to 5.14%. Companies specializing in data center solutions, such as "Elis," were also adversely affected, with their stock plunging by more than 30%, amid concerns over declining revenues and funding challenges related to investing in advanced technologies. Firms are facing hurdles due to reduced bets on data centers and questions about their financial viability, amid regulatory efforts to spin off units like "Solidigm" for initial public offerings in the U.S. market. This has raised fears of eroding market value and financial fragmentation, reflecting the market's fragility and structural challenges in South Korea’s technology sector.
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