South Korea's Kospi index falls below 5,000; analysts say it has entered a phase of panic selling.

South Korean chip stocks plunge as fears grow that a Democratic sweep of Congress could slow the AI buildout. In early trading on Friday, shares of Samsung Electronics and SK Hynix both plunged more than 10%, dragging the Kospi index down 8.8%. The Korea Exchange briefly halted trading for 20 minutes shortly after the open. Global stocks suffered a sharp selloff on Thursday, with the Nasdaq 100 falling 6.4% and shedding a record $2.3 trillion in market value. The slump pushed South Korea's benchmark index below the 5,000 target set by President Lee Jae-myung in 2025. The Kospi had quickly surpassed that level as the AI boom boosted chipmaker profits; but after doubts about the AI outlook mounted, the Kospi has plunged 46% from its record high set in June, and 5,000 has once again become the market's focus. Kim Dojoon, chief executive of Zian Investment Management, said that ultimately, we have entered a phase of panic selling. In a market like today's, most market participants will likely be forced to sell.