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Kospi slides 4% as Wall Street drops on AI bubble concerns

Published: 05 Feb. 2026, 17:43

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 5163.57 points on Feb. 5, down 207.53 points, or 3.86 percent, from the previous trading session. [NEWS1]

The main bourse tumbled almost 4 percent on Thursday as big-cap shares sharply lost ground, tracking tech giants' tumble on Wall Street on continued woes over the high valuation of AI companies. The local currency dropped sharply against the dollar.

The Kospi slid 207.53 points, or 3.86 percent, to close at 5,163.57.

The Kospi fell back below the landmark 5,300-point mark just a day after reaching the milestone.

Trade volume was heavy at 904.7 million shares worth 32.2 trillion won ($21.9 billion), with losers outnumbering winners 575 to 308.

Foreigners and institutions unloaded local shares worth 5 trillion won and 2 trillion won, respectively, while retail investors continued their buying spree, purchasing 6.76 trillion won.

It marked the largest-ever daily sell-off by foreign investors, which is far above the previous high of 2.8 trillion won posted on Nov. 21 of last year, and also the largest-ever daily purchase by retail investors.

The tech-heavy Nasdaq composite dipped 1.51 percent, and the S&P 500 lost 0.51 percent as U.S. investors stepped up their selling of blue-chip tech shares, such as the Magnificent Seven companies and AMD, amid valuation woes.

"U.S. tech shares dropped for the second consecutive day, also affecting the Korean stock market," Lee Kyoung-min, an analyst at Daishin Securities, said.

Lee said the tech slide was sparked by persisting woes over the profitability of AI-related companies, citing the steep drop of AMD, a fabless semiconductor company based in the United States.

Figurines with computers and smartphones are seen in front of the words ″Artificial Intelligence AI″ in this illustration from Feb. 19, 2024. [REUTERS/YONHAP]

"Fundamentally, tech stocks are losing ground as investors are moving to take profit amid mounting fatigue over the constant rally in the shares and their valuation re-rating," he added.

In Seoul, semiconductor, nuclear power and electricity shares lost ground, reflecting AI bubble concerns.

Semiconductor heavyweight Samsung Electronics nose-dived 5.8 percent to 159,300 won, and its rival SK hynix shot down 6.44 percent to 842,000 won.

AI investment firm SK Square slid 6.15 percent to 534,000 won, and nuclear power plant manufacturer Doosan Enerbility tumbled 6.11 percent to 90,600 won.

The state-run Korea Electric Power lost 1.28 percent to 61,900 won.

Defense and shipbuilding shares also lost ground following their recent rally.

Defense giant Hanwha Aerospace plunged 7.33 percent to 1.23 million won, and Hyundai Rotem plummeted 9.41 percent to 207,000 won.

Major shipbuilders HD Hyundai Heavy and Hanwha Ocean pulled back 5.66 percent and 5.83 percent to 550,000 won and 135,600 won, respectively.

Leading automaker Hyundai Motor also contracted 3.08 percent to 488,500 won, and Samsung Biologics dropped 3.35 percent to 1.7 million won.

The local currency fell 18.8 won from the previous session to trade at 1,469 won against the greenback at 3:30 p.m.

U.S. Treasury Secretary Scott Bessent reaffirmed Washington's commitment to a strong dollar.

Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys dropped 0.8 basis points to 3.204 percent, and the return on the benchmark five-year government bonds lost 2.8 basis points to 3.505 percent.

Yonhap