Kospi Drops 7.6% as Artificial Intelligence Profitability Concerns Hit South Korean Stocks

South Korea's benchmark Kospi index dropped 7.57% to close at 5,554.22 on October 15, marking its seventh consecutive losing session. The index fell past the 6,000 level shortly after opening and triggered automated trading halts and circuit breakers. Over the seven-day decline, total market capitalization plunged by 1,193.5 trillion won, representing a 20.67% loss. The tech-heavy Kosdaq board also tumbled 7.65% to end at 760.82.

The severe market drop was fueled by growing global concerns over the financial return and funding costs of artificial intelligence investments. Major South Korean semiconductor producers led the losses, with Samsung Electronics falling 9.48% and SK Hynix dropping 11.06%. Skepticism mounted after slowing revenue growth at AI startup Anthropic and plunging bond prices for neocloud provider CoreWeave highlighted the high cost of debt financing for tech infrastructure. In addition, U.S. inflation for September came in higher than anticipated at 3.7%, worsening broader market sentiment.

Investors are turning their focus to upcoming quarterly earnings reports from major technology companies later this month. Key indicators to monitor include corporate credit default swap premiums, corporate bond yields, and whether capital spending plans meet market expectations. Market stability will also depend on whether borrowing costs and global inflation metrics begin to level off in the coming months.