Japan and South Korea Stocks Slump as Kospi Closes Down 7.57%, Nikkei 225 Falls Nearly 5%, Kioxia Drops Over 12%

TradingKey - On October 15, Japanese and South Korean stock markets suffered a heavy sell-off. South Korea's benchmark KOSPI index closed down 7.57% at 5,554.23 points, with intraday losses extending to 9% at one point and triggering a circuit breaker for the tenth time this year; Japan's Nikkei 225 Index closed down 4.90% at 64,425.90 points.

Source: TradingView

In the South Korean market, Samsung Electronics closed down 9.48% at 210,000 won (about $56), while SK Hynix fell 11.06% to 1.262 million won. Japanese markets were also under pressure, with Kioxia dropping 12.32% to 12,880 yen (about $82) and SoftBank Group declining 9.33% to 4,852 yen.

On the same day, circuit breakers were triggered across both South Korea's KOSPI and the tech-heavy KOSDAQ markets. Trading on the KOSPI was halted for 20 minutes starting at 12:38 p.m. local time, with related futures and options trading also suspended. This marked the tenth time the KOSPI market triggered a circuit breaker this year.

The sell-off came after U.S. inflation data exceeded expectations and concerns over AI infrastructure financing escalated. Following the release of the U.S. September CPI, market fears of another Federal Reserve rate hike intensified. Overnight, the Nasdaq fell 1.88%, while AI infrastructure companies such as Oracle (ORCL) and CoreWeave (CRWV) saw their stock prices drop sharply. Investors worry that persistently high interest rates will increase financing costs for data center construction and equipment procurement, placing pressure on corporate earnings and future investments.

In response to severe market volatility, South Korean financial regulators held an emergency meeting on the same day, calling for proactive measures to maintain market stability and strengthen investor protection, while urging financial institutions to avoid disorderly credit expansion and manage risks effectively. Regulators also stated that they would crack down on market-disrupting behavior and activate contingency plans if necessary.