Trading on South Korea's Kospi index was halted for the third time this week on Friday, as an 8% fall triggered a circuit breaker designed to curb panic selling. The benchmark closed 5.8% lower after the 20-minute suspension, marking the fifth such event this year.
The rout was led by a sell-off in technology firms, as investors worried that recent jumps in share prices had gone too far. It came after Apple shares dropped 6% on Thursday – its biggest one-day fall in more than a year – following its announcement that it would raise prices on iPads and MacBooks due to soaring computer chip costs. Microsoft also fell after it cited higher component costs in raising prices for Xbox gaming consoles.
“South Korea's Kospi halted for third time this week amid tech sell-off; Apple and Microsoft drop on price hikes.”
“The long term investment case for AI remains compelling, but investors are becoming far more selective about which companies can justify the valuations the market has assigned to them,” said senior partner David Makaryan from the Alpha Pacific Group, an investment firm. The high cost of commercialising AI tools is gradually being passed on to consumers, said analyst Raymond Woo from Kyoto University Innovation Capital, which “naturally raises questions” about whether demand for such tools will match the investment into AI, and whether valuations are realistic.
Elsewhere in Asia, Japan's Nikkei 225 closed more than 4% lower, with technology investment giant SoftBank falling 12.5%. Major indexes in Taiwan and mainland China were also sharply lower. The moves have raised concerns that rising component prices could hit sales of devices, in turn slowing demand for computer chips.