South Korea’s KOSPI plunges more than 8% in new tech rout
Asian tech stocks also sank on Friday as the rollercoaster ride that has characterised the week continued into the weekend, while crude prices edged back down after a brief rally sparked by news of an attack on a ship in the Strait of Hormuz.
A currency trader watches monitors near a screen showing the Korea Composite Stock Price Index (KOSPI) and the foreign exchange rate between the US dollar and South Korean won at the foreign exchange dealing room of the Hana Bank headquarters in Seoul, South Korea, on Jun 26, 2026. (File photo: AP/Ahn Young-joon)
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SEOUL/HONG KONG: South Korean stocks collapsed more than 8 per cent on Friday (Jun 26), sparking a 20-minute halt in trading, amid a fresh rout in tech firms and following a sell-off on Wall Street.
The KOSPI index sank 8.2 per cent to 8,199.81 – before a 20-minute trading halt was called – at the end of a week during which it had seen wild swings.
Asian tech stocks also sank on Friday as the rollercoaster ride that has characterised the week continued into the weekend, while crude prices edged back down after a brief rally sparked by news of an attack on a ship in the Strait of Hormuz.
Seoul and Tokyo took the brunt of the selling, tracking 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.
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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 have 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.”
Chip giants SK hynix and Samsung were down around 5 per cent each in early trading.
The index has seen some wild moves this week – including Tuesday’s 10 per cent drop – amid waxing and waning optimism over the AI boom.
Tokyo, which is also heavy with tech firms, shed more than 3 per cent. Tech investment giant SoftBank plunged more than 12 per cent 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, Singapore and Taipei.
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.
Oil prices resumed the downward shift that has marked the week, having risen around 2 per cent on Thursday on news that a cargo ship was damaged by an unknown projectile off Oman’s coast in Hormuz.
That prompted the International Maritime Organisation to halt an evacuation of crews trapped by the US-Iran war and sparked concerns about the shaky truce put in place as the two foes hold peace talks.
US media reported that Iran struck the ship in the strait, and the Iranian agency that claims to regulate traffic there issued a warning afterwards.
“Any passage through routes outside the framework designated by PGSA will not be covered by safe passage guarantees,” the Persian Gulf Strait Authority said on X.
Iran has said it plans to introduce what it terms maritime service fees, which could complicate negotiations with Washington.
Source: AFP/rk
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