KOSPI Dips Below 5,000 Amid AI Investment Fears

On November 6, 2026, South Korea's KOSPI index faced significant turmoil, dropping over 8% during intraday trading. This decline was largely attributed to fears surrounding artificial intelligence (AI) investments, particularly in light of the recent U.S. midterm elections. Analysts expressed concerns that a Democratic majority in Congress could hinder the rapid expansion of AI data centers, a sector crucial for tech companies.

The KOSPI closed at 5,059.69, reflecting a 6.02% decrease. Major players like Samsung Electronics and SK Hynix saw their shares plummet by 6.35% and 10.44%, respectively, contributing to the overall market decline. The tech-heavy NASDAQ also experienced a slump, further influencing the KOSPI's performance.

Market analysts predict continued volatility in the local stock market, with the KOSPI 200 volatility index reaching a three-month high. Yoon Chang-yong from Shinhan Financial Investment noted that fears regarding global AI investment spending are spreading, leading to increased caution among investors.

In response to the market's instability, Finance Minister Lee Hyoung-il announced measures to stabilize the situation, including easing requirements on leveraged investments for three months starting next week. He emphasized the importance of monitoring external uncertainties while maintaining confidence in South Korea's economic fundamentals.