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Asian tech stock market selloff

South Korea's Kospi index triggered a rare circuit breaker after plunging 8.5 percent, while Japan's Nikkei 225 shed 5.1 percent in a synchronized market collapse.

Factlen Newsroom· Updated

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Illustration: The Kospi index plunged 8.5 percent on Friday, triggering a market-wide circuit breaker.From: Asian Tech Rout Triggers Circuit Breaker in South Korea as Kospi and Nikkei Plunge

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On November 6, by 03:22 UTC, a massive sell-off in Asian semiconductor equities led to a synchronized market collapse. South Korea's Kospi index plunged 8.5 percent, which triggered a 20-minute Level 1 circuit breaker to halt market-wide trading. Japan's Nikkei 225 also dropped 5.1 percent to 56,930, erasing massive swaths of equity value across the technology sector.

The Asian market rout followed a brutal overnight session on Wall Street, where the Nasdaq Composite dropped 5.5 percent following United States midterm election results. Investors fear that a shifting US political landscape will result in stricter environmental and antitrust regulations on artificial intelligence data centers.

How the story developed

The benchmark Kospi index reached a peak in June before beginning a steep decline. By mid-October, the index had fallen significantly, driven by growing doubts about the profitability of artificial intelligence infrastructure and renewed US inflation fears.

On October 16, hotter-than-expected US inflation data raised fears of sustained high interest rates squeezing AI infrastructure investments. This catalyzed a major selloff in South Korea, where the Kospi plunged 7.57 percent and fell more than 8 percent intraday. The drop triggered a 20-minute market-wide trading halt.

Asian benchmark indices suffered severe losses in early Friday trading.From: Asian Tech Rout Triggers Circuit Breaker in South Korea as Kospi and Nikkei Plunge ·

During the October 16 collapse, semiconductor giants Samsung Electronics and SK Hynix led the decline, shedding roughly 10 percent amid heavy foreign selling. Foreign investors offloaded trillions of won in domestic equities, causing the South Korean won to weaken past the 1,350-per-dollar mark.

Following a 35 percent decline in the benchmark index from its June peak, Goldman Sachs lowered its 12-month target for the Kospi index by 25 percent to 9,000 on October 25. The revision was prompted by concerns over AI infrastructure spending and led to more conservative valuation assumptions.

Memory chip manufacturers and equipment suppliers absorbed the heaviest losses.From: Asian Tech Rout Triggers Circuit Breaker in South Korea as Kospi and Nikkei Plunge ·

Despite the downgrade, Goldman Sachs strategists maintained that the market remained deeply undervalued, noting the revised target implied over 60 percent upside. The bank indicated a continued preference for non-memory sectors, including power generation, industrials, and corporate governance-related stocks.

What to watch

  • Market participants are watching whether a shifting United States political landscape will result in stricter environmental and antitrust regulations on artificial intelligence data centers.

Charts, maps and images

The Asian market rout was directly imported from a brutal overnight session on Wall Street.From: Asian Tech Rout Triggers Circuit Breaker in South Korea as Kospi and Nikkei Plunge ·
The benchmark index has fallen sharply from its mid-year highs, prompting analysts to revise their 12-month projections.From: Goldman Sachs Lowers South Korea Kospi Target by 25 Percent Amid AI Trade Retreat ·
Valuations outside the memory chip sector have shown more resilience compared to the broader index.From: Goldman Sachs Lowers South Korea Kospi Target by 25 Percent Amid AI Trade Retreat ·
The benchmark index erased months of gains in a single session.From: South Korea's Kospi Triggers Circuit Breakers in 7.6% Drop as Chip Giants Plunge ·
Rising financing costs for U.S. infrastructure providers triggered the selloff in Asian hardware suppliers.From: South Korea's Kospi Triggers Circuit Breakers in 7.6% Drop as Chip Giants Plunge ·
Illustration: Massive capital expenditures on data centers remain a focal point for investors scrutinizing the AI supply chain.From: Goldman Sachs Lowers South Korea Kospi Target by 25 Percent Amid AI Trade Retreat ·
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Illustration: The market-wide halt was the first time since July that both South Korean exchanges tripped circuit breakers on the same day.From: South Korea's Kospi Triggers Circuit Breakers in 7.6% Drop as Chip Giants Plunge ·

Timeline

November 2026

  1. Asian Tech Rout Triggers Circuit Breaker in South Korea as Kospi and Nikkei Plunge

October 2026

  1. Goldman Sachs Lowers South Korea Kospi Target by 25 Percent Amid AI Trade Retreat
  2. South Korea's Kospi Triggers Circuit Breakers in 7.6% Drop as Chip Giants Plunge