South Korea’s KOSPI index fell 3.73% on Tuesday, October 20, closing at 5,552.74 and erasing a two-day rebound. Chipmakers led the drop: SK hynix fell 4.23% to its lowest close since April, and Samsung Electronics lost 2.98%. Investors took profits and kept questioning the returns on heavy AI investment, while escalating protests in France reduced appetite for risk. Foreign investors sold a net 535.4 billion won and institutions about 1 trillion won.
The index had already fallen about 21% over seven sessions from October 6 through last Thursday, so the latest decline deepens an already sharp selloff. An analyst at Daishin Securities said concerns about AI investment credit risks and profitability “have yet to be fully resolved,” which limits how durable any rebound can be.
The crypto link is South Korea’s retail base. Crypto Insiders reports the country has more than 11 million crypto exchange trading accounts, and investors who bought stocks with borrowed money could be forced to sell. Tom Lee and others warn that such forced selling could add pressure to crypto prices. That is a risk, not a certainty.
US stocks ended mixed overnight, with tech rebounding from its steepest weekly drop since June. Traders will watch whether Asian weakness spills into Bitcoin and altcoins when US markets open.
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Sources:
- Korea JoongAng Daily: Kospi plunges nearly 4% as AI concerns hit Samsung, SK hynix
- Crypto Insiders: Zuid-Koreaanse beurs opnieuw onderuit, crypto kan volgen
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