Korean Stocks Tumble 8% as SK Hynix Falls 57% From Peak

Quick Answer: Korean stocks tumbled 8%, with SK Hynix Inc and Samsung Electronics Co each falling more than 9%. Foreign investors sold more than US$10 billion of Korean equities in October, driven by Fed rate-hike fears and CoreWeave’s funding stress. For shareholders, the test is whether large AI spending holds up as borrowing costs rise.

What Triggered the Korean Stocks Selloff?

Korean stocks selloff hits SK Hynix and Samsung Electronics — Korean stocks slid as worries over Fed rate hikes and AI funding built up.

Worries over US Federal Reserve rate hikes and AI funding difficulties pushed Korean stocks lower. Korea’s stock exchange halted trading for 20 minutes as selling deepened.

US consumer prices rose in September at the fastest clip in five months. That spurred bets on more aggressive Fed tightening.

Japan’s Nikkei 225 dropped more than 5%. Ibiden Co and Kioxia Holdings Corp were among the worst performers.

How Far Have SK Hynix and Samsung Fallen?

SK Hynix Inc and Samsung Electronics Co each fell more than 9%.
SK Hynix is down 57% from its summer peak.
The stock soared more than 1,000% in the 12 months through June, fuelled by leveraged exchange-traded products tied to the chipmaker.
It has lost more than US$660 billion in market value from its all-time high.

Strong earnings from Samsung and ASML Holding NV failed to calm investors. A closely watched US gauge of semiconductor stocks erased US$1.6 trillion in a six-day losing streak.

Why Did CoreWeave’s Debt Spook AI Investors?

CoreWeave Inc shares plunged as its bonds due 2032 slid to about 78 cents on the dollar. That level typically indicates distress.

Elon Musk flagged the drop with a “yikes” on his social media platform. Late last month, SoftBank Group Corp paid record yields to fund its AI ambitions.

Hebe Chen, an analyst at Vantage Global Prime, said: “Korea is becoming the shock absorber for the global AI selloff.” She added that the pressure is pushing investors to further unwind positions in Samsung and SK Hynix.

Has the Kospi Valuation Become More Attractive?

The Kospi trades at less than 5 times forward earnings estimates. That is less than half the level a year ago.

Kang DaeKwun, chief executive officer at Life Asset Management, said: “The South Korean stock market’s valuation has dropped to an extreme level now.” He added that investors must make sure problems over tech funding are resolved first.

How Much Have Foreign Investors Sold in October?

Foreigners dumped US$1.8 billion of Kospi equities on Thursday morning alone. They have sold more than US$10 billion in October.

The Kospi is on track for its seventh straight day of declines, headed for its lowest close since early April.

What Is Next for Korean and Taiwanese Chip Stocks?

The Taiex gauge fell more than 3%. The chip-heavy Star 50 index of onshore stocks fell to its lowest since April.

Taiwan Semiconductor Manufacturing Co reports earnings later Thursday, and its shares slipped as much as 2.8% in morning trading. Taiwanese tech stocks have held up better than Korean peers in recent weeks.

Jo Hyunik, an investment division manager at Iroom Investment Advisors, expects this volatile, flow-driven market to persist until there is greater clarity on US rates and the midterm elections.

Which Bursa Malaysia Stocks Are Linked to This Selloff?

The source report does not name any Bursa Malaysia-listed company. Readers tracking AI-linked exposure can start with AI Stock Analysis for Malaysians and check each company’s exposure to memory chips and AI infrastructure in its own filings.

Key Takeaways

The Kospi is on track for seven straight daily declines, its lowest close since early April.
SK Hynix is 57% below its summer peak and has lost more than US$660 billion in market value.
CoreWeave‘s 2032 bonds slid to about 78 cents on the dollar, a distress level.
The Kospi trades at less than 5 times forward earnings, less than half its level a year ago.

This article is for information only and is not investment advice. Always do your own research before making any investment decision, and consider speaking to a licensed adviser.

Frequently Asked Questions

Why are Korean stocks falling in October?

Korean stocks fell after worries over Fed rate hikes and AI funding intensified, with SK Hynix and Samsung Electronics each down more than 9%. Foreign investors have sold more than US$10 billion of Korean equities in October.

How far has SK Hynix fallen from its peak?

SK Hynix is down 57% from its summer peak. The stock has lost more than US$660 billion in market value from its all-time high.

Is the Kospi cheap after the selloff?

The Kospi trades at less than 5 times forward earnings estimates, less than half its level a year ago. Kang DaeKwun of Life Asset Management called the valuation extreme, while money managers are calling for caution.

Does the Korean selloff affect Bursa Malaysia stocks?

The source report does not name any Bursa Malaysia-listed company, so it gives no direct figures for local shares. Investors should check each company’s AI and memory-chip exposure in its own filings.

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