South Korean stocks opened significantly lower Tuesday, with the KOSPI index down 5.26%. Losses were driven by a selloff in tech and semiconductor shares, following a weak performance on Wall Street's Nasdaq, despite eased Middle East tensions.
The sharp decline in Seoul stocks highlights investor concerns over the technology sector's valuation and spending on AI, overshadowing eased geopolitical tensions in the Middle East.
South Korean stocks opened sharply lower Tuesday, dragged down by losses in tech shares following a selloff in chipmakers on Wall Street. The benchmark Korea Composite Stock Price Index (KOSPI) shed 355.48 points, or 5.26 percent, to 6,400.27 at the opening bell.
Overnight Wall Street finished mixed, with the Nasdaq declining 0.18 percent and the Dow Jones Industrial Average rising 0.51 percent. However, semiconductor shares were weak as investors remained skeptical about tech giants' heavy spending on artificial intelligence (AI). The PHLX chip index, a gauge of U.S. semiconductor giants, extended its recent selloff, falling 2.2 percent.
Meanwhile, U.S. President Donald Trump said Washington and Tehran were having "good talks," and there was a chance of a deal over the ongoing conflict, but he warned that the fighting would resume if the negotiations fail.