Korea's Kospi Index Drops Below 5,000 as Analysts Say Panic Selling Has Set In

South Korean chip stocks plummeted as markets grew concerned that a Democratic Party sweep in the National Assembly could slow the AI boom. Early Friday trading saw Samsung Electronics and SK Hynix shares fall more than 10%, dragging the Kospi index down 8.8%. Trading was briefly suspended for 20 minutes after the Korean exchange opened. Global stocks also suffered heavy losses on Thursday, with the Nasdaq 100 dropping 6.4% as market value evaporated by a record $2.3 trillion. The downturn pushed major Korean indices below President Lee Jae-myung's 5,000 target for 2025. While the AI boom previously drove chipmakers' profits and helped the Kospi quickly surpass this goal, rising doubts about AI prospects have seen the index crash 46% from its June high, making 5,000 a focal point again. Kim Dojoon, CEO of Zian Investment Management, stated that we have ultimately entered a panic selling phase where most market participants are likely forced to sell in today's environment.