HONG KONG: South Korea's Kospi index plunged more than 10% on Tuesday on heavy selling of chipmaking stocks that have gyrated recently due to concerns over the sustainability of the boom in artificial intelligence.
Oil prices fell more than 1 per cent, while US futures were little changed.
Trading was temporarily halted as Kospi dropped to its lowest level since April as shares in chipmakers Samsung Electronics and SK Hynix dropped sharply. The Kospi was down 10.5 per cent at 6,051.19 by midday.
Samsung's shares tumbled 12 per cent while those for SK Hynix were down 12.7 per cent.
A big factor driving the selling of AI-related shares, analysts said, is the expectation that competition from Chinese AI startups and chipmakers might undermine gains for global companies whose shares have skyrocketed due to the AI frenzy.
A 466 per cent jump in the price of Chinese chipmaker CXM T in its trading debut Monday has underscored such concerns. CXMT raised at least USD 8.6 billion in its initial public offering on Shanghai's tech-oriented STAR exchange.
Most other Asian markets also fell, with Tokyo's Nikkei 225 down 4 per cent at 62,350.18. The Taiex in Taiwan skidded 3.9 per cent.
Hong Kong's Hang Seng edged 0.1 per cent lower, to 25,178.21, while the Shanghai Composite index lost 1 per cent to 3,820.52.
In Australia, the S&P/ASX 200 balked the regional trend, gaining 0.6 pe cent to 8,944.40.
Oil prices extended their declines as US and Iran refrained from attacks for a third straight day.
Officials in the Middle East said mediators had made progress in getting the two sides back to negotiations.
Brent crude, the international standard, fell 0.8 per cent to USD 85.16 a barrel.
US benchmark crude oil lost 0.9 per cent to USD 81.86 a barrel.
Stocks on Wall Street drifted to a mixed close Monday.
The S&P 500 rose less than 0.1 per cent and the Dow Jones Industrial Average rose 0.5 per cent. The Nasdaq composite fell 0.2 per cent for its fourth straight loss.