South Korea's Kospi Falls About 5 Percent as the Global Chip Selloff Reaches Asia

South Korean equities led a decline across Asian markets on Thursday. The Kospi fell as much as 5 percent during the session, and the Korea Exchange activated the safeguard that suspends program sell orders after a sharp drop (its sell-side sidecar), the Korea JoongAng Daily reported. SK Hynix fell 8.27 percent and Samsung Electronics 5.69 percent at one point, according to TradingKey. India's Economic Times reported that foreign investors sold artificial-intelligence-linked technology shares and that the losses were concentrated among Korean retail investors, some of whom said publicly they would not buy stocks again.

The decline began in New York. The Dow Jones Industrial Average rose 0.49 percent on Wednesday to close at 54,349.12, while the S&P 500 slipped 0.17 percent to 7,723.55 and the Nasdaq Composite fell 0.83 percent to 26,363.44. Memory-chip maker SanDisk reported strong fourth-quarter revenue but guided below expectations for the coming quarter, which lowered investor expectations across the memory-chip sector that Samsung and SK Hynix dominate. Israeli daily Globes wrote on Thursday that Asian markets were falling and Korea led the decline, that Wall Street and oil prices were steady, and that two Israeli-listed technology companies, Taboola and SolarEdge, together lost more than a billion dollars of market value overnight.

The divergence matters more than the level. Europe's STOXX Europe 600 closed at 656.86 on Tuesday, helped by falling oil prices and corporate earnings, and Euronews catalogued the year's best performers across the index. Indices with a broad industrial and financial base are climbing at the same time that indices concentrated in memory and logic chips are falling. That is a rotation out of the narrow group of stocks that drove global benchmarks higher over the past two years, not a general withdrawal from equities.

Traders also faced a supply event on Thursday. The first lockup on SpaceX shares expired, making a large tranche of insider stock eligible for sale. CoinDesk put the figure at about $101 billion, while The Motley Fool counted 911.5 million shares. Other estimates ranged as high as $123 billion depending on the share price used. The stock had already fallen below its offering price in July, Axios reported, as the expiry approached.