AI stock rout halts KOSPI trading, hits Nikkei | Magica
AI stock rout halts KOSPI trading as Nikkei touches bear-market threshold
Editorial Team
••📖6 min read
South Korea halted KOSPI share trading after a plunge of more than 8%, while Japan’s Nikkei touched 20% below its June peak. Investors fear a slowdown in AI infrastructure spending, but the market losses do not yet establish cuts to construction or supplier orders.
KOSPI share trading stopped for 20 minutes after South Korea’s benchmark fell more than 8%.
Japan’s Nikkei dropped as much as 7.1%, touching 20% below its June peak during the session.
The selloff reflects fears about AI investment returns and possible construction restrictions; it does not establish that orders have been cancelled.
South Korea halted trading in KOSPI-listed shares on Friday, November 6, as an AI-led selloff spread from Wall Street through Asian suppliers. Japan’s Nikkei touched the threshold for a technical bear market, while selling in Korea extended across every sector.
Reported intraday declines on November 6, 2026, from the previous close. Session lows need not coincide; these are not confirmed closing results. Source: Moneycontrol.
The immediate concern is demand for the chips and equipment that underpin AI development. Asian suppliers had benefited from the infrastructure boom; doubts about its continuation now threaten their growth expectations as well as those of US technology companies.
At 9:50 a.m., the KOSPI was at 4,961.62, down 7.84%, according to an early-session report. Memory-chip suppliers Samsung Electronics and SK hynix fell 9.1% and 11.3%, respectively. The electrical and electronic equipment sector fell 9.92%.
The companies’ prior results help explain their exposure. SK hynix said revenue from its HBM memory products more than doubled in 2025 from the previous year, contributing to record results. Samsung Electronics provided a more recent counterpoint to spending fears: in its October 29 earnings release, it reported record quarterly memory revenue and operating profit. The company said its memory business was focused on AI products amid capacity constraints, with strong server demand driving up prices. These results describe business before this week’s political and market shocks.
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Korea’s losses reached well beyond that supply chain. Construction shares fell 8.2% and financials 7.58%. Every sector was lower, although individual stocks including Samsung Biologics and Hanjin KAL rose. The breadth limits any reading of the session as a precise measure of damage to AI businesses alone.
Japan’s technology-heavy Nikkei 225 Stock Average fell as much as 7.1% to 56,745.81, putting it 20% below its June peak—the conventional technical bear-market threshold. The broader Topix fell as much as 6.4%. Cable maker Furukawa Electric and semiconductor company Rohm each lost more than 10%. Taiwan’s Taiex was also described as on course to enter a technical bear market.
These were early-session readings or intraday extremes, not confirmed closing bear markets.
Political fears hit an already weakened AI trade
Thursday’s US selloff provided the immediate backdrop. The S&P 500 lost 4.4%, its worst day since the April 2025 tariff shock, while the Nasdaq composite fell 5.5%. That put the Nasdaq 11.9% below its record high set the previous month, beyond the 10% decline commonly called a correction.
Nvidia, the AI-chip supplier whose large market value gives it exceptional influence over the S&P 500, fell 9.3% and was the index’s biggest drag. Its shares were down 2.6% for the year after annual gains of roughly 39%, 171% and 239% in the preceding three years. Rival chipmaker Advanced Micro Devices fell even more sharply, losing 17.3%.
The losses also reached companies selling access to computing and supplying power equipment. CoreWeave, which rents AI-chip capacity through the cloud, declined 9.8%; GE Vernova, which supplies equipment helping to power data centers, fell 7.5%.
A regional market report said investors feared that Democratic victories in Tuesday’s US midterm elections would bring greater regulatory scrutiny and slow the AI build-out. It described Asian chipmakers and data-center equipment suppliers as especially vulnerable, with their shares already falling on Wednesday and Thursday.
That political concern arrived on top of doubts about returns on the enormous sums invested in AI. It also reflects public resistance: the US market report described voters across party lines as wary of AI and unhappy about data centers’ effects on power bills. Neither report established that a new government-ordered construction pause had taken effect.
Selected suppliers illustrate November 5 losses across chips, cloud computing capacity and power equipment. Share-price declines do not measure changes in supplier orders. Source: AP News.
Financing costs and trading mechanics complicate the picture
Expensive borrowing had already fed months of concern about the pace of data-center construction. But Thursday’s market moves did not amount to a fresh rise in benchmark financing costs. The US 10-year Treasury yield fell to 4.84% from 4.90% late Wednesday, after standing above 5.30% the previous month. The market report suggested investors might be seeking safety in government bonds. Falling Treasury yields do not, by themselves, establish what financing is available to individual developers.
Korea’s early trading also showed buyers as well as sellers. Foreign investors were net sellers of 302 billion won of KOSPI shares, while individuals and institutions bought a net 25.7 billion won and 235.4 billion won, respectively. Those figures describe that snapshot, not full-day flows or investor motives.
The KOSPI’s Level 1 circuit breaker activates when a decline of at least 8% from the previous close persists for one minute. The separate KOSDAQ index was down 6.66% at 9:50 a.m., after a sell-sidecar activated around 9:06 a.m. That measure suspends the effect of program-trading orders for five minutes, rather than halting all share trading.
Historical evidence illustrates why the size of a fall need not map directly onto a change in expected earnings. Japan’s Financial Services Agency, the financial regulator, used detailed Nikkei 225 futures orders and trades from the Osaka Exchange in a January 2025 study of the August 5, 2024 selloff. It found evidence suggesting depleted liquidity amplified selling pressure.
In that earlier episode, the daily time-weighted average number of contracts offered to buy within five ticks of the best bid fell to 79.55, against a year-to-date average of 322.20—roughly one quarter as much depth. The study concerns futures trading in 2024; it does not establish that the same mechanism drove Friday’s losses.
The next test is policy and supplier orders
The central unresolved question is whether investors are anticipating a spending slowdown that will actually occur. A slower data-center build-out would reduce demand for chips, electricity and equipment, but Friday’s share-price losses do not quantify any such reduction.
Evidence of new construction restrictions, revised project schedules, changes in financing or weaker supplier orders would distinguish that outcome from a sharp change in valuations. Until then, the reports establish a broad market selloff and concern about the durability of AI spending, with the scale of any business impact still unresolved.
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