Asian markets plunge amid US correction

Trading halt in Seoul

On the morning of 6 November, the Seoul exchange was forced to halt operations just minutes after the session began. An automatic circuit breaker was triggered after the KOSPI index fell by 8.6%. Trading was suspended for 20 minutes. The last similar incident in South Korea occurred on 5 August 2024.

The KOSPI index opened down 2%, but soon plunged below the 5,000-point mark, showing a decline of 8.55%.

Losses for tech giants

Companies operating in the semiconductor sector were hit hardest. Samsung Electronics shares fell by 10%, while SK Hynix dropped by 12%. According to FourWeekMBA, these two companies lost a combined approximately $166 billion in market capitalisation in a single trading session.

Similar dynamics were observed in Japan. The Nikkei index fell by 6.2%, dropping below the 60,000-point level to 57,289.

Impact of the US market

The cause of the Asian crash was the previous day's closing of the trading session in New York. The Nasdaq index lost 5.52%, marking its worst performance since spring 2025. The S&P 500 fell by 4.3%, and the Dow Jones by 3.4%.

Among tech stocks, AMD (down 16.8%) and Nvidia (down 9.2%) fell the most. The SOX semiconductor index dropped by 12% overnight.

Causes of the market reaction

The market is reacting to changes in the political landscape in the US. Following the Democrats' victory, investors are assessing the risks of increased regulation of the artificial intelligence and data centre sectors. South Korea and Japan are key producers of memory and chips that underpinned the current AI boom. A shift in regulatory policy in America is causing uncertainty regarding demand for Asian products.

Timeline of the week's events

On 3 November, investment funds began exiting positions in the AI sector. On 4 November, the Democrats gained control of Congress. On 5 November, the US market initially rose but then fell sharply after lunch. On 6 November, the negative momentum spread to Asian markets.

Today in the US, the release of the employment report is expected, which could provide a reason for a brief pause in market volatility.

Situation analysis

Current events indicate not a one-off panic, but a reassessment of investment strategies related to artificial intelligence. Investors should check what proportion of their assets (stocks, funds, pension programmes, cryptocurrencies correlated with Nasdaq) depends on this sector.

Technical circuit breakers may halt trading, but they do not stop the process of asset revaluation.