KOSPI Tumbles More Than 8%, Triggering Trading Halt as AI Trade Unwind Hits Korea

South Korean stocks plunged Monday, with the KOSPI Index tumbling more than 8% and triggering a 20-minute trading halt shortly after the open, as investors unwound crowded artificial intelligence bets that had powered the world's biggest equity rally, Bloomberg reports. Memory chipmaker Samsung Electronics fell as much as 11% and SK Hynix slid 10%, reflecting the outsized exposure of Korean markets to AI concentration risk. The Korea Exchange convened an emergency meeting to assess volatility and discuss stabilization measures. 
Foreign investors continued to sell after withdrawing more than $10 billion worth of KOSPI shares on a net basis last week, while the won rebounded from its weakest level against the dollar since March 2009 after the government unveiled currency support measures on Sunday. Margin debt has hit a record 38 trillion won ($24.4 billion) as of end-May, amplifying the selloff. 
The rout came despite a high-profile weekend announcement that Nvidia and SK Hynix had agreed to partner on next-generation AI memory chips. "Given the crowded positioning in semiconductors and the current volatile environment, some degree of panic selling is not surprising," said Albert Yong of Petra Capital Management. Fibonacci Asset Management CEO Jung In Yun said it was "too early to conclude that today's selloff marks the beginning of a prolonged bear market."