SEOUL: South Korean shares plunged on Tuesday as a global selloff in chipmakers weighed on technology heavyweights, pressured by concerns over intensifying competition from China and a steep decline in SK Hynix's U.S.-listed shares.
The benchmark KOSPI dropped 500.47 points, or 7.41%, to 6,253.81, prompting the activation of "sidecar" trading curbs on both the KOSPI and the junior Kosdaq index, temporarily suspending programme trading.
Memory-chip maker SK Hynix sank 10% after its American depositary receipts (ADRs) fell to a record low in New York and dropped below their initial U.S. offering price. Samsung Electronics, another major index constituent, fell 9.15%.
The two chipmakers together account for more than half of the KOSPI's weighting, amplifying the impact of the sector-wide selloff on the broader market.
Market sentiment was further dampened by developments in China, including a blockbuster market debut for ChangXin Memory Technologies (CXMT) and reports that a Chinese state-backed firm began producing immersion DUV lithography equipment.
"The market's concern lies less in CXMT's current earnings and more in its potential for accelerated capacity expansion to rival Korean companies and technology development following its IPO," said Kim Seok-hwan, a Seoul-based market analyst at Mirae Asset Securities. - Reuters
