Trading on South Korea’s Kospi index was halted for the third time this week on Friday as an 8% plunge triggered a circuit breaker designed to curb panic selling. The benchmark index closed 5.8% lower after a 20-minute suspension, marking the fifth such event this year in a market that has become increasingly volatile.
The sell-off, which swept across Asia, was led by technology firms after Apple announced it would raise prices on iPads and MacBooks due to soaring memory chip costs. Apple shares had already fallen 6% in New York on Thursday – their biggest one-day drop in more than a year – and Microsoft also slid after citing higher component costs for an increase in Xbox console prices.
“South Korea halts trading for third time this week as tech stocks slide on Apple chip crisis.”
Investors are now questioning whether last year’s rally in tech shares has gone too far. “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 David Makaryan, senior partner at Alpha Pacific Group.
The concern is compounded by the hundreds of billions of dollars big tech firms are spending to build artificial intelligence infrastructure, with the cost of commercialising AI tools now being passed on to consumers. “That naturally raises questions about how quickly demand for such tools will match the investment into AI, and whether the valuations of tech stocks today are realistic,” said Raymond Woo, analyst at Kyoto University Innovation Capital.
Japan’s Nikkei 225 closed more than 4% lower, dragged down by a 12.5% plunge in SoftBank. Other major indexes in Taiwan and mainland China also fell sharply. The rout follows a pattern of extreme swings in South Korea, where trading has been repeatedly suspended this year as authorities try to stem panic.