The KOSPI fell more than 8% intraday, with the report attributing the decline to concerns following the US midterm elections that the Democratic Party would regulate the artificial intelligence (AI) industry becoming more concrete. Market caution increased after a governor elected in the US vote said data center construction should be halted. According to the Korea Exchange on November 6, the KOSPI closed that day at 5,059.69, down 6.02%, or 324.11 points. It fell as low as 4,911.28 before recovering slightly in the afternoon to finish trading. As market unease over the fallout from the US elections spread, the KOSPI returned to a level seen approximately 10 months earlier. The KOSDAQ closed at 644.27, down 5.03%, or 34.14 points. South Korean stocks also fell sharply after all three major US indexes declined by around 3% to 5% overnight. The Dow Jones Industrial Average fell 3.4%, the S&P 500 fell 4.4% and the Nasdaq fell 5.5%. The report attributed the sharp stock market decline to market concerns over US data center industry regulation becoming more concrete. On November 5, local time, Texas governor-elect Hinojosa, who is due to take office in January 2027, said, “We will create legislation to protect Texas residents, and data center-related activities need to stop until those protections are in place.” The report argued that the prospect of regulation in Texas, considered a key location for data center construction, would make disruption to South Korea's AI industry unavoidable. According to a report released in January by US energy company Bloom Energy, Texas is expected to account for approximately 30% of total US data center electricity demand in 2028. South Korean semiconductor stocks also extended their losses. Samsung Electronics closed down 6.35% at 188,700 won, while SK hynix fell 10.44% to close at 1,132,000 won. In response to the stock market decline, financial authorities decided that day to waive the requirement to maintain a 140% collateral ratio for margin loans for three months. This was because excessive forced selling following share price declines could increase market volatility.
Original Korean article: ETNews
English brief by Korea Wind Intelligence, koreawindintel.com
