Kospi Index Plunges 6% as Chipmakers Feel Brunt of AI Downturn
Asian markets were mixed on Wednesday as concerns over artificial intelligence investments led to a sell-off in chipmakers' shares. The South Korean Kospi index fell 6% after SK Hynix's operating profit missed analyst forecasts, with its share price plummeting by 9.4%. Samsung Electronics also dropped 4.8%, contributing to the decline.
The downturn was triggered by doubts over massive investments in AI, which have led investors to dump shares in chipmakers. This is not the first time this has happened, as progress in China on cheaper and advanced AI models has raised concerns among investors.
Other Asian markets were also affected, with Tokyo's Nikkei 225 losing 1.5% and Taiwan's Taiex shedding 3.8%. However, Hong Kong's Hang Seng gained 1.8%, while the Shanghai Composite index reversed early losses to rise by 0.4%.
The surge in oil prices also had an impact on markets, with Brent crude jumping 3.1% to $84.58 a barrel and benchmark U.S. crude gaining 3.6% to $82.14 a barrel. This was due to a brief pause in fighting in the Iran war being shattered by Jordan's air defenses intercepting five missiles launched from Iran.