The Korea Composite Stock Price Index (KOSPI) crashed 404.21 points, or 6.73%, to 5,604.6 as of 11:20 am on Thursday, 15 October, as a dual shock — mounting scepticism over artificial intelligence (AI) spending sustainability and a hotter-than-expected US Consumer Price Index (CPI) print — triggered a broad sell-off of major technology shares in Seoul.

Circuit Breaker Triggered in Early Trade

The slide was severe enough in the opening minutes that Korea's bourse operator temporarily suspended trading for five minutes after the benchmark index shed more than 5% in early session — a circuit-breaker threshold designed to prevent panic-driven cascades. The brief halt did little to stem the broader decline, as selling pressure resumed once the pause lifted.

Tech Heavyweights Bear the Brunt

Semiconductor giants led the carnage. Samsung Electronics tumbled 7.87% while SK Hynix plunged a steeper 9.87% — a particularly sharp drop for a chipmaker that had been riding AI-driven memory demand optimism for much of the year. Hyundai Motor fell 5.1%, KB Financial slid 1.13%, and defence conglomerate Hanwha Aerospace dipped 1.54%. Among the rare bright spots was biotech firm Celltrion, which bucked the trend to add 3.13%.

What Spooked Global Markets Overnight

The catalyst came from Wall Street, where US stocks closed lower on Wednesday (US time) after official data showed the US CPI for September rose 0.6% from the previous month — the fastest monthly increase since April. The print stoked fears that the US Federal Reserve may have less room to ease monetary policy, compounding existing anxiety about whether large-scale AI infrastructure spending by major technology companies is commercially sustainable at current valuations. Seoul's tech-heavy index, deeply exposed to both AI supply chains and US macro conditions, was among the hardest-hit markets in the region. Notably, this marks one of the sharpest single-session declines for the KOSPI in recent memory.

Won Weakens, Household Loan Growth Slows

The Korean won weakened to 1,350 won per US dollar as of 11:20 am, down 7.7 won from the previous session's close — reflecting broader risk aversion. Separately, data from the Bank of Korea (BOK) released on Thursday showed that outstanding household loans extended by banks reached 1,198.9 trillion won (approximately US$895.5 billion) in September, rising by just 0.6 trillion won month-on-month. That is the smallest monthly increase since March 2026, when such loans grew by 0.5 trillion won, and a sharp slowdown from the prior month's 3.5 trillion-won rise. According to the BOK, tightened lending regulations and higher interest rates are credited with cooling credit growth. Outstanding mortgage loans rose 2.9 trillion won on-month to 955.5 trillion won, while other household loans contracted by 2.3 trillion won to 242.6 trillion won.

What to Watch Next

All eyes will be on upcoming US Federal Reserve guidance and any further AI earnings commentary from major US technology firms, both of which could determine whether Thursday's rout deepens or stabilises. For Korean chip stocks, the trajectory of AI hardware orders and US inflation expectations through the fourth quarter will be the critical variables.