South Korean shares fall more than 5% as AI regulation concerns weigh

MoneyToday reported that the KOSPI fell more than 5% and reached its lowest level in seven months.[1] It said the index had fallen below 5,400 on a closing-price basis since last April.[1] The report contrasted South Korea’s decline with gains across most major overseas markets, including the United States, after the midterm elections.[1] The Dow Jones rose 3.03%, the S&P 500 gained 1.6% and the Nasdaq Composite closed up 1.4%.[1] The Euro Stoxx rose 2.3%, and Hong Kong’s Hang Seng gained in the 3% range, while Taiwan’s Weighted Index fell in the 3% range and Japan’s Nikkei dropped more than 1%.[1]

MoneyToday reported that the possibility of stronger regulation of AI data centers had emerged as a negative factor for semiconductor stocks.[1] Potential rules could cover data-center electricity use, regional burdens, environmental issues, monopolies and labor-market impacts.[1] The report said such measures could reduce profits for Korean and Taiwanese companies.[1] Democratic Party candidates who advocated development regulations won in major data-center investment areas, including Texas and Georgia.[1] The report also said concerns were raised that new data-center construction schedules could be delayed.[1] The report also described concerns about higher construction costs and slower new investment weighing on domestic semiconductor companies’ earnings forecasts.[1]

Foreign investors net sold about 10.3 trillion won in KOSPI shares over five trading days, including 3.8 trillion won on Nov. 5.[1] An intraday sell-sidecar was triggered.[1] MoneyToday separately reported foreign net sales of 10.9 trillion won in SK hynix shares and 9.7 trillion won in Samsung Electronics shares, as well as sales in Samsung Electro-Mechanics and LS Electric.[1] Semiconductor materials, components and equipment stocks also fell sharply.[1] The report presented a counterview: some market participants considered the concerns excessive, citing easing global uncertainty and stabilizing interest rates, oil prices and exchange rates.[1]