The KOSPI Index slipped by over 2.25% today, with Samsung Electronics and SK Hynix leading the losses amid jitters on the artificial intelligence industry. It also slipped as crude oil soared amid the ongoing US-Iran crisis. It slipped to 6,754, down by 28% from its highest level this year.
Samsung Electronics and SK Hynix stocks slip
The KOSPI Index, which tracks the biggest companies in South Korea, slipped as its biggest constituents dropped. Samsung Electronics stock dropped by 3.76%, while SK Hynix fell by 5.30%. SK Square, a top SK Hynix investor, dropped by 7%.
These stocks dropped amid the rising concerns about the artificial intelligence (AI). Last week, an Anthropic employee resigned, warning that the current phase of development risked making humanity extinct.
In a long blog post on Saturday, Dario Amodei, the company’s CEO, urged the industry to slow down the pace of AI models development. Other top players in the industry, like Sam Altman and Elon Musk also supported the move.
In theory, this should lead to a slowdown in key industries like memory and GPUs. However, in reality, chances are that these companies will continue spending in data centers, which will benefit companies like Samsung and Electronics.
A key challenge in slowing down these models is that Chinese companies like Moonshot and Deepseek are not slowing down. As such, American companies will want to have the best models to compete with their Chinese counterparts.
Soaring crude oil prices amid Middle East chaos
The KOSPI Index is falling as crude oil prices surge as the crisis in the Middle East escalates. Brent, the global benchmark, rose by 2.25% on Monday to $106.9, while the West Texas Intermediate (WTI) jumped to $102.
Oil is rising after Saudi Arabia shut its East-West pipeline after it came under sustained attacks from Iraqi militias, who were responding to a recent attack that killed tens of people. The shutting of this pipeline is a major development because Saudi Arabia has been using it to bypass the Strait of Hormuz.
At the same time, Trump has maintained that the US-Iran war will end after the midterm electioon. This means that the blockade of the Strait of Hormuz will continue, affecting oil supplies. South Korea imports most of its oil from the Middle East.
Looking forward, the Kospi Index will react to the upcoming Federal Reserve interest rate decision and a meeting between the Iran and the GCC countries.
KOSPI Index technical analysis
Kospi Index chart | Source: TradingView
The daily chart shows that the Kospi Composite Index has slippe in the past few days. It has formed an ascending channel and is now along the lower side. This channel has a close resemblance to a rising wedge pattern, a common bearish reversal sign.
The index remains below the Supertrend indicator, a sign that bears are in control for now. It also remains below the 50-day Exponential Moving Average (EMA) and the Major S/R pivot point of the Murrey Math Lines.
Therefore, the path of the least resistance for the index is downwards, with the next key target being at 6,000.
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