Seoul: South Korea’s stock market witnessed a sharp sell-off on Friday as heavyweight technology shares tumbled, dragging the benchmark KOSPI sharply lower amid broader weakness across Asian markets.

The market decline came after investors turned cautious due to rising geopolitical uncertainty, higher oil prices and increasing US bond yields, all of which weighed heavily on global investor sentiment.

The sharp fall in major chipmaker and technology stocks also triggered fresh concerns around the momentum of AI-linked investments in Asian markets.

Kospi Index drops more than 6 per cent

The Kospi Index fell more than 6 per cent during trading, retreating sharply after recently touching record highs.

The benchmark index ended the session at 7,493.18 after earlier breaching the 8,000 mark in the previous session.

Analysts described the move as one of the biggest recent pullbacks in the South Korean market, driven largely by heavy selling in technology and semiconductor stocks.

Investors reportedly shifted toward safer assets amid concerns over global economic uncertainty and rising borrowing costs.

Samsung and SK Hynix lead market decline

Shares of Samsung Electronics declined more than 8 per cent after the company’s labour union announced plans to proceed with an 18-day strike beginning May 21.

Reports suggested the strike could involve over 4,500 workers, raising concerns about production disruptions at one of the world’s largest semiconductor manufacturers.

Meanwhile, shares of SK Hynix also dropped more than 7.5 per cent during the session.

The sell-off in semiconductor giants significantly impacted the broader market because of their large weightage in the Kospi Index.

Asian markets under pressure

The decline in South Korean equities mirrored weakness across several Asian markets.

Rising crude oil prices and a sharp increase in US Treasury yields have increased pressure on investor sentiment globally.

Market participants are also closely monitoring geopolitical developments and their possible impact on inflation, trade flows and global supply chains.

Technology and AI-related shares across the region remained under pressure as investors reassessed valuations following months of strong rallies.

Investors remain cautious

Financial experts said investors are currently adopting a cautious approach due to uncertainty surrounding global economic conditions and central bank policies.

Higher bond yields often reduce appetite for riskier assets such as technology stocks because investors shift funds toward safer fixed-income investments.

The labour dispute at Samsung further added to concerns over potential disruptions in the semiconductor sector, which remains critical to South Korea’s export-driven economy.

Focus remains on tech sector recovery

Analysts believe the direction of South Korean markets in the coming weeks will largely depend on developments in the technology and semiconductor industries.

Any easing in geopolitical tensions, stabilisation in oil prices or improvement in global investor confidence could help markets recover.

However, continued volatility in global bond markets and concerns over inflation may keep pressure on equities in the near term.

For now, investors remain focused on major technology companies and chipmakers as indicators of broader market sentiment across Asia.