South Korea’s stock markets on Tuesday fell over 8 per cent due to the renewed selling in the Information Technology (IT) stocks as investors continued to pare exposure to AI-linked shares. The Kospi fell 8.18 percent to 7,392.04 weighed down by sharp losses in heavyweight chipmakers Samsung Electronics and SK Hynix.
Samsung Electronics slumped 7.4%, while SK Hynix fell 6.4% ahead of its planned US listing
The broader weakness came amid growing concerns that the rally in artificial intelligence-related stocks may have run ahead of fundamentals.
Hyundai Motor declined 5.9%, Hanwha Aerospace lost 4% while Hanwha Ocean plunged 23%.
The decline comes after Tuesday’s sharp fall in the equities that surrendered early gains as investors turned increasingly cautious over elevated valuations in artificial intelligence-linked stocks.
The sharp correction has raised concerns over whether the turbulence could spill over to Indian equities, particularly given the growing integration of global capital flows and the significant weight of technology stocks in domestic benchmark indices.
At the opening trade, Sensex and Nifty opened on a positive note with marginal gains. The Nifty opened at 24,464.45 and the Sensex opened at 78,461.16.
India’s stronger macroeconomic fundamentals may offer some cushion, analysts expect increased volatility in the near term as investors assess the impact on foreign fund flows, IT stocks and overall market sentiment.
Rajesh Palviya, Head of Research, Axis Direct said optimism moderated across Asian markets this morning as profit booking in technology shares and renewed concerns over Gulf shipping disruptions weighed on sentiment. South Korea’s Kospi declined more than 4%, while Japan’s Nikkei slipped below the 70,000 mark.
Axis Securities on the performance of IT services sector in the country said they are expected to remain soft in Q1FY27 amid a cautious demand environment, with growth partially supported by large deal ramp-ups, outcome-based engagements, and AI-led spending. Margins are likely to remain mixed, impacted by wage hikes and AI investments, but partly offset by currency depreciation and productivity gains.