Korean stock market slump drags down emerging market assets, cooling AI expectations become a key factor

Odaily Planet Daily News Driven by a sharp drop in the South Korean stock market, emerging market stocks and currencies weakened for the third consecutive trading day. The MSCI Emerging Markets Index fell 1.7% to 1,728.66 points, with South Korea's Kospi index once plunging as much as 7% intraday. The sell-off was concentrated in the semiconductor sector. Samsung Electronics and SK Hynix, which together account for more than half of the Kospi's market capitalization, led the declines. This followed Broadcom's AI chip sales outlook, which failed to meet high market expectations, triggering a shift in investor sentiment.

Charu Chanana, Chief Investment Strategist at Saxo Markets, stated that if U.S. non-farm payroll data comes in stronger than expected, it could provide another reason for investors to reduce crowded AI trades. The market is currently closely monitoring this data to gauge the future path of the Federal Reserve's interest rates.