Kospi falls 7.4% and Nikkei enters a bear market as the AI sell-off reaches Asia

South Korea's Kospi fell 7.4% to 4,985.99 and Japan's Nikkei 225 traded 5.7% lower at 57,576.63 by midday on Friday, November 6, after the sell-off in AI-related stocks on Wall Street, the Associated Press reported. CNBC reported that the Nikkei entered a bear market, meaning a fall of at least 20% from a peak, and that Seoul briefly halted trading.

Seoul paused trading, and Tokyo fell below its bear-market line

CNBC said the Kospi was "plunging more than 8% in early trading Friday, triggering circuit breakers with trading suspended for 20 minutes." By the time of the AP's midday report the index was down 7.4%, and Samsung Electronics shares had shed 7.9% in morning trading.

In Tokyo, the AP said the Nikkei 225 "tumbled more than 6% after trading opened" and then recouped some of the loss. CNBC said the selling "dragged the benchmark more than 20% below its June peak." The two reports measure different moments of the session, so the percentages differ.

France 24 reported that Seoul "plunged almost nine percent at one point," with SK hynix "off 10 percent" while Samsung "was eight percent down." It said Tokyo "dived seven percent as Kioxia and SoftBank gave back more than 10 percent," and that "TSMC's seven-percent drop dragged Taipei's Taiex around eight percent lower."

Other Asian markets fell by less

Australia's S&P/ASX 200 lost 1.0% to 8,973.00, the Hang Seng in Hong Kong fell 0.7% to 24,630.03 and the Shanghai Composite dipped 1.3% to 3,642.10, the AP reported. The two largest falls were in Japan and South Korea.

Wall Street's Thursday session set the starting point

The AP said the S&P 500 fell 4.4% on Thursday, its worst day since April 2025, and the Nasdaq composite sank to 11.9% below its record set last month. Nvidia fell 9.3% and Advanced Micro Devices 17.3%. FinanceInTime covered that session in an earlier report.

The AP tied the selling to worries "that the construction of AI data centers may slow because of how expensive it's become to borrow money," and said the Democratic victories in Tuesday's midterm elections raised the possibility that governments could force pauses in data center construction. It also noted that stock prices follow corporate profits and interest rates over the long term, "depending on them much more than on who controls what in Washington."

Treasury yields and oil moved far less than stocks

The yield on the 10-year Treasury fell to 4.84% from 4.90% late Wednesday, the AP said. It had been at 4.95% on election night and above 5.30% last month. In energy trading, U.S. crude added 0.65% to $91.11 a barrel and Brent gained 1.4% to $99.73. The dollar rose to 157.97 Japanese yen from 157.68.

We would watch the chip-heavy indexes before reading this as a wider repricing

We think Friday's moves say the AI trade has become a global position, not a US one: the biggest losses fell on the Asian markets that supply and make the chips. Because yields and oil moved little by comparison, the pressure so far looks like a repricing of one theme, not of rates or energy.

The threat is a feedback loop, in which falling chip shares tighten funding for the data-center buildout that those companies depend on. The opportunity is that markets with less exposure, such as Hong Kong and Australia, held up better. We would expect volatility in Seoul and Tokyo to stay high for weeks if US data-center pauses become law, and to ease if they prove narrow. We would change our view if yields rise while stocks fall, which would point to a wider repricing.

The view in this final section is FinanceInTime's editorial opinion, for information only. It is not investment, tax, legal or other advice, and it does not take your circumstances into account. Forecasts are uncertain and past results do not guarantee future ones.