Seoul tanked again on Friday, leading another rout across Asian equity markets as the rollercoaster ride that has characterised the week rattled into the weekend.
The Kospi has seen wild swings over the past five days amid growing concern about a possible bubble in the tech sector that some warn could soon burst.
The sell-off followed heavy losses on Wall Street, where Apple led Magnificent Seven titans lower after announcing price hikes for laptops, tablets and other products citing rising costs.
The news caused a reverse on the Nasdaq and S&P 500, which had been boosted early on by blowout results from chip company Micron.
Amazon and Microsoft added to the downbeat mood after the European Union said they should face tougher digital competition rules because of their dominant position in cloud computing.
The tech sector has been the main driver of a surge to record highs across several markets globally amid an eye-watering boom in all things AI.
However, that euphoria appears to be waning of late, with company valuations looking stretched and traders questioning when firms will see a return on the trillions that has been invested.
“A few cracks have developed in the tech sector recently,” Miller Tabak’s Matt Maley said.
“Therefore, we believe it will be extremely important to watch how these hyperscalers trade going forward because if they continue to decline, it’s going to make it very tough for the rest of the market to advance.”
Seoul’s Kospi dived around nine percent in afternoon trade, before finishing almost six percent off. Chip giants and market heavyweight SK hynix shed more than eight percent and Samsung lost 5.3 percent. The rout sparked a 20-minute trading halt on the Kospi.
The index has seen some wild moves this week amid waxing and waning optimism over the AI boom. The index suffered a 10 percent drop on Tuesday — also sparking a trading halt — before recovering on Wednesday and Thursday.
Tokyo, also heavy with tech firms, shed more than four percent. Tech investment giant SoftBank plunged more than 12 percent as the New York Times reported that ChatGPT-maker OpenAI is considering holding off an initial public offering until 2027.
There were also steep losses in Hong Kong, Shanghai, Taipei, Singapore, Jakarta, Manila and Bangkok.
London, Paris and Frankfurt opened lower.
The losses came even as investors pared expectations for US interest rate hikes after data showed the Federal Reserve’s favoured gauge of inflation came in slightly lower than expected in May.
