SEOUL: South Korean shares dropped sharply on Friday to post their biggest weekly fall in more than three months, as overnight losses in U.S. tech stocks prompted investors to book profits.
The benchmark KOSPI closed down 519.09 points, or 5.81%, at 8,411.21, after falling 9% earlier in the day and triggering circuit breakers for the second time this week.
It was also the fifth time that circuit breakers were activated on the benchmark this year and the 11th in history amid heightened market volatility.
The KOSPI posted a weekly drop of 7.1%, the biggest since early March when the Iran war hit global financial markets. Despite the loss, it has doubled in value this year, after rising 76% in 2025.
Chipmaker Samsung Electronics fell 5.3% and peer SK Hynix dropped 8.4% on Friday. The two chipmakers account for more than 50% of the benchmark.
"Market sentiment weakened as doubts grew over AI-related corporate value and investment demand," said Lee Kyoung-min, an analyst at Daishin Securities.
U.S. technology shares reversed early gains to end lower on Thursday, weighing on the Nasdaq as investors worried about hyperscaler spending on AI and who foots the bill. Those fears outweighed upbeat signals on AI demand from Micron and Qualcomm.
"Today's slump can be mostly explained by high volatility amid concentration in the chip sector, while worries about memory demand declining are a bit excessive," said Han Ji-young, an analyst at Kiwoom Securities.
Samsung Group will announce on Monday plans to invest 1,000 trillion won ($650.87 billion) in South Korea over 10 years, including a potential 300 trillion won to build chip factories in the southwest of the country, a report said.
Most other index heavyweights also fell, with battery maker LG Energy Solution down 5.8%, while Hyundai Motor and sister automaker Kia Corp declined 4.5% and 3%, respectively.
Of the total 915 traded issues, 111 shares advanced, while 780 declined.
Foreigners were net sellers of shares worth 4.6 trillion won, while retail investors, who have been leading the KOSPI's world-beating rally this year, bought 8.2 trillion won of shares, helping the index cut losses near the session close.
The won was quoted up 0.7% on the day at 1,532.0 per dollar on the onshore settlement platform, erasing early losses of 0.4%. - Reuters
