SEOUL: South Korean stocks plunged on Friday to post their steepest weekly drop since late March as a global tech pullback and stalling U.S.-Iran peace talks heavily dented investor risk appetite.
The Korean won hit its lowest against the dollar since 2009 while bond yields spiked, prompting government officials, including finance minister Koo Yun-cheol, to issue a verbal warning against speculative one-way bets.
On Wall Street, Broadcom tumbled more than 12%, pulling semiconductor stocks elsewhere lower, after the chipmaker's results disappointed investors who had bet on surging demand for its custom AI chips. The Philadelphia semiconductor index lost 2.2%.
Korea's benchmark KOSPI closed down 478.82 points, or 5.54%, at 8,160.59, marking its biggest daily percentage fall since May 15. It ended the week down 3.7%.
During the session, the KOSPI fell as much as 6.96%, triggering a "sidecar" trading curb.
Chipmaker Samsung Electronics fell 6.4% and peer SK Hynix dropped 9.9%.
The two chipmakers have been rewriting global equity rankings, helping lift KOSPI by more than 200% over the past year.
The firms' outsized influence in the $5.01 trillion stock market has both excited investors and raised concerns about risks of the market overheating.
Hyundai Motor and sister automaker Kia Corp were unchanged and down 1.95%, respectively. Steelmaker POSCO Holdings shed 2.99%, while drugmaker Samsung BioLogics fell 0.74%.
Foreigners were net sellers of shares worth 3.5 trillion won ($2.27 billion). Of the total 923 traded issues, 225 shares advanced, while 672 declined.
"Funds that have been overweight Korean equities to start are likely facing concentration limits at this point, and we understand single-stock concentration limits may also be a factor motivating investors to sell," Michael Loh of JPMorgan Chase Bank wrote in a report.
The won, down almost 7% against the greenback so far this year, was quoted at 1,539.1 per dollar, down 0.46% on the day, after hitting its weakest level since March 2009 at 1,549.1 earlier in the session.
In money and debt markets, June futures on three-year treasury bonds lost 0.01 point to 102.94.
The most liquid three-year Korean treasury bond yield rose by 1.7 basis points to 3.871%, while the benchmark 10-year yield rose by 0.7 basis points to 4.236%. - Reuters
