South Korean stocks hit by tech sell-off, oil price fears

South Korean stocks came under pressure amid a global sell-off in technology shares, with the benchmark KOSPI falling more than 8% in early trading on Friday.

Shares in memory chipmakers SK Hynix and Samsung Electronics also slumped, losing 11% and 8% respectively.

The sharp losses prompted the Seoul stock exchange to suspend trading for 20 minutes. The so-called circuit breaker is designed to prevent panic selling from further destabilizing the market.

Investors appeared to be reacting to losses on Wall Street, where concerns about the future of artificial intelligence investment weighed on share prices. The Democrats’ victory in the US midterm elections fuelled fears that the expansion of data centres could slow.

Plans to build new facilities have faced growing opposition in the United States over their substantial funding requirements and potential environmental impact.

South Korea’s Yonhap news agency also cited the risk of higher oil prices as a factor behind the sell-off, after Iran said several more tankers had been damaged in the Strait of Hormuz.

As an energy-poor industrialized nation, South Korea relies heavily on oil imports from the Middle East. Its stock market is also particularly vulnerable to swings in the AI sector because of the semiconductor industry’s large weighting in the benchmark index.

Elsewhere in Asia, Japan’s benchmark Nikkei 225 fell around 6.5% in early trading. Hong Kong’s Hang Seng Index was down about 1.3% shortly after the market opened, while China’s CSI 300 index, which tracks the 300 largest mainland-listed companies, lost around 1.7%.