South Korea’s benchmark Kospi index fell 6.3% to 6,650.41 points on Friday, marking a severe acceleration in the market’s retreat from the artificial intelligence trade that has powered Asian equities this year.
The sharp decline followed a 5% drop on Monday, signaling that investor confidence in the sustainability of heavy capital expenditure by major US technology firms is eroding rapidly.
The Kospi’s two-day decline of nearly 11% highlights the fragility of the current rally and suggests that volatility may persist as traders reassess risk exposures.
The sell-off was compounded by a spike in oil prices, which added pressure to corporate margins and consumer sentiment across the region.
Brent crude moved higher as supply concerns persisted, creating a dual headwind for equity markets already vulnerable to profit-taking after a prolonged rally.
The combination of rising energy costs and fading enthusiasm for AI infrastructure spending has forced investors to aggressively lock in gains, particularly in semiconductor and tech-heavy portfolios.
This development underscores a broader shift in market dynamics, where the narrative of endless growth in AI-related assets is being challenged by macroeconomic realities.
The Kospi’s two-day decline of nearly 11% highlights the fragility of the current rally and suggests that volatility may persist as traders reassess risk exposures.