South Korea's KOSPI plunges 3.7% as AI spending doubts hit Asian tech stocks
Foreign and institutional investors dumped Korean shares, sending Samsung and SK hynix lower. Worries about how AI data centres are financed, high oil prices and France's unrest weighed on markets across Asia.
At a glance
- South Korea's KOSPI fell 215.27 points, or 3.73%, to 5,552.74 on Tuesday, October 20, wiping out two days of gains; the KOSDAQ fell 3.33%.
- Foreign investors sold a net 530.3 billion won and institutions 1.005 trillion won of shares; retail investors bought 898.9 billion won.
- SK hynix fell 4.23% and Samsung Electronics 2.98%; Hyundai Motor dropped 4.91%.
- Analysts blamed doubts about the profitability and financing of AI investment, rising bond yields, oil near $110 and a stronger won.
South Korea's stock market suffered another heavy fall. The benchmark KOSPI dropped 3.73% to 5,552.74 on Tuesday, October 20, as foreign and institutional investors sold chip and technology shares amid growing doubts about the artificial intelligence boom.
The day in numbers
| Close | Change | |
|---|---|---|
| KOSPI | 5,552.74 | −215.27 (−3.73%) |
| KOSDAQ | 781.97 | −26.92 (−3.33%) |
| Intraday low (KOSPI) | 5,493.24 | Briefly below 5,500 |
Who sold
| Investor group | Net trade (main board) |
|---|---|
| Foreign investors | Sold 530.3 billion won |
| Institutions | Sold 1.005 trillion won |
| Retail investors | Bought 898.9 billion won |
Biggest movers
| Company | Close | Change |
|---|---|---|
| SK hynix | 1,223,000 won | −4.23% |
| Samsung Electronics | 211,500 won | −2.98% |
| SK Square | — | −5.00% |
| Hyundai Motor | — | −4.91% |
| LG Energy Solution | — | −4.17% |
Why markets fell
Analysts pointed to several pressures at once:
- AI doubts: investors are questioning whether the vast sums being spent on AI data centres will pay off — and how AI infrastructure companies will raise the money. A Korean data-centre operator opened below its share-sale price this week.
- Bond yields: global interest rates and government bond yields are rising, partly because of political and financial instability in France.
- Oil: Brent crude near $110 a barrel because of the Middle East conflict raises costs and inflation fears.
- Currency: a stronger won — the dollar fell below 1,330 won — hurts exporters' earnings.
- Profit-taking: after two days of gains, some investors cashed in.
Overnight gains on Wall Street, where the Nasdaq rose about 1.1%, were not enough to lift sentiment.
Across Asia
Japan's Nikkei 225, Hong Kong's Hang Seng and China's Shanghai Composite also fell. AI-linked stocks such as SoftBank Group, which has made huge AI investments, were among the hardest hit. Bitcoin also slipped.
What analysts say
Lee Kyoung-min of Daishin Securities said profit-taking hit sectors such as defence, shipbuilding and nuclear power hardest. Han Ji-young of Kiwoom Securities said the market looks oversold, with signs of panic selling, and advised investors to hold and watch third-quarter earnings.
Why it matters
South Korea's market is dominated by chipmakers that supply memory for AI servers, so it is one of the first places where doubts about AI spending show up. Big swings in Asian markets can spread to emerging markets, including Pakistan's, and affect currencies and investor confidence worldwide.
What happens next
Investors are watching earnings from major US tech companies this week, including Meta and Tesla, and Korean companies' third-quarter results for signs that AI demand remains strong.
Questions people are asking
Why did the KOSPI fall on October 20, 2026?
Investors sold chip and tech stocks over doubts about the profitability and financing of huge AI investments, alongside rising global bond yields, high oil prices and a stronger won, which hurts exporters.
How much did Samsung and SK hynix shares fall?
Samsung Electronics fell 2.98% to 211,500 won and SK hynix fell 4.23% to 1,223,000 won on October 20, 2026.
Did other Asian markets fall?
Yes. Japan's Nikkei, Hong Kong's Hang Seng and China's Shanghai Composite also fell, with AI-linked stocks such as SoftBank Group among the biggest losers.
