Kospi selloff reflects shift in investor sentiment; TCS, HCL Tech, Infosys top gainers 

South Korea's stock index Kospi crashed over 7% today on a selloff in chip shares with Asian shares mostly falling after US stocks ended mixed. Kospi index fell 7.4% to 5,914.35 today, its lowest level since late July. In June, the index hit an all-time high after crossing 9,000, led by the global artificial intelligence boom.

Shares of Samsung Electronics plunged 8.18%, while memory chipmaker SK Hynix plunged 8.8%.

Investor concerns over the sustainability of the AI-driven rally have weighed on sentiment, clouding the outlook for memory chipmakers. Shares of both companies fell after reports suggested that China’s CXMT is making technological advances that could intensify competition for global industry leaders Samsung Electronics, SK Hynix and Micron Technology.

IT stocks gain

The selloff in chip stocks in Korea led to a sentiment booster for IT stocks in the Indian market. Shares of TCS, HCL Technologies, Tech Mahindra and Infosys zoomed up to 6%  and were the top gainers on both Sensex and Nifty.

BSE IT index was the top gainer in early deals, rising 829 pts to 29,047. Nifty IT too added 935 pts to 29,282. FIIs inflows into the AI theme has led the tech-heavy Kospi to rise 39% this year. On the other hand, Nifty has plunged 14% on a year to date basis.

Global markets 

Following suit, Japan's Nikkei 225 dropped 2.5% to 67,292.39. Chip equipment maker Tokyo Electron fell 6.6%. SoftBank Group, an OpenAI investor, lost 8%.

Hong Kong's Hang Seng fell 1% to 24,033.51. The Shanghai Composite index slipped 1.1% to 3,754.82.

Australia's S&P/ASX 200 also traded 0.2% lower at 8,767.40.

Taiwan's Taiex fell 1.9%, with its leading chipmaker TSMC, or Taiwan Semiconductor Manufacturing Co., down 1.6%.

In the US, Wall Street's benchmark S&P 500 fell 0.1%. The Dow Jones Industrial Average rose 0.4%, and the technology-heavy Nasdaq composite closed 0.4% lower. Chip-related shares were the leading losers. Nvidia was down 1.3%. Advanced Micro Devices, or AMD, was 2.3% lower. Micron Technology lost 3.9%. Broadcom fell 1.9%.

On Wall Street, investors are also watching this week's earnings announcements by major firms including big banks, with Citigroup, JPMorgan Chase and Wells Fargo reporting results.

Brent crude snaps three-day rally 

Meanwhile, brent crude prices fell today after three days of gain. Traders feared that the widening West Asia war could stall the recovery in regional supply.

Brent crude traded below $106 a barrel in early Asian trade after rising over 6% over the previous three sessions. It hit a high over $107 in the previous day's trading before falling to $105.87. Benchmark US crude was also down 1.5% to $92.34 a barrel.