Stories
AI and Semiconductor Stocks Plunge Up To 6 Percent Amid Global Selloff
- •Artificial intelligence and semiconductor-related stocks in India such as Netweb, ESDS Software, and E2E Networks fell up to 6 percent on October 15.
- •The downturn was triggered by a massive global selloff in chipmakers, which pushed South Korea's equity benchmark into a bear market with a nearly 8 percent drop.
- •Concerns over potential Federal Reserve interest rate hikes grew after US consumer prices advanced at their fastest pace in five months.
- •Investors are increasingly questioning whether heavy investments in AI infrastructure will yield commensurate returns, prompting a shift toward safer assets.
- •Power equipment firms and other AI-allied stocks also suffered declines of 3 to 5 percent amid mounting anxieties over high energy consumption and inflation.
Key Questions Answered
Investor anxiety intensified after data revealed that U.S. consumer prices advanced at their fastest pace in five months during September, fueling expectations of aggressive Federal Reserve interest rate hikes. Additionally, concerns over AI funding difficulties and whether heavy AI investments will yield adequate returns drove a retreat from the sector.
South Korea's equity benchmark dropped nearly 8%, pushing the Kospi into a bear market after falling about 21% from its September high. Heavyweights like SK Hynix Inc. and Samsung Electronics Co. each plunged more than 9%, prompting the stock exchange to halt trading for 20 minutes.
Artificial intelligence-related stocks in India such as E2E Networks, ESDS Software, and Netweb Technologies traded up to 6% lower, while allied stocks like MTAR Tech, Anant Raj, and Black Box fell 3% to 5%. Power equipment stocks including Hitachi Energy India, GE Vernova T&D India, and CG Power and Industrial Solutions also dropped 4% to 5%.
