Seoul shares drop 3.4% as AI spending fears meet US midterm jitters

South Korea's benchmark KOSPI fell 196.71 points, or 3.36 percent, to 5,662.37 by 9:15 a.m. on Tuesday, as investors sold technology and artificial intelligence shares ahead of the US midterm elections.

The losses followed a mixed session on Wall Street, where the Nasdaq Composite closed 1.07 percent lower and the S&P 500 slipped 0.51 percent, while the Dow Jones Industrial Average gained 0.41 percent. According to Token Times, the pullback reflected lingering concern over the scale of spending on AI infrastructure rather than any single earnings miss.

In Seoul, market bellwether Samsung Electronics fell 4.59 percent and chipmaker SK hynix dropped 5.1 percent. Hyundai Motor declined 1.57 percent, Doosan Enerbility sank 3.77 percent, HD Hyundai Heavy Industries fell 2.26 percent and Hanwha Aerospace slipped 0.81 percent.

Oil prices eased on optimism over a potential US-Iran peace agreement, offering some relief on input costs even as equity investors retreated. The Korean won traded at 1,342.05 against the dollar at 9:15 a.m., up 3.95 won from the previous close.