AI Valuation Fears Trigger Sharp KOSPI Decline The KOSPI dropped 1.33% to 4,002.6 in early trading on Dec 17 and fell another 1.53% to 3,994.5 on Dec 18, reflecting heightened anxiety over AI‑related earnings prospects[1][2]. Both sessions opened amid reports that a primary investor withdrew from Oracle’s data‑center project, a catalyst that reverberated across Korean and U.S. markets[2]. The sell‑off underscored investors’ sensitivity to AI valuation metrics after recent tech rally gains.

Oracle Funding Withdrawal Amplifies Market Anxiety Oracle shares slumped more than 5% after news that its major funding partner abandoned the data‑center venture, intensifying concerns about AI profitability[1][2]. The drop contributed to broader declines in U.S. indices, with the S&P 500 down 1.2%, the Dow 0.47%, and the Nasdaq 1.8% on the same day[2]. Analysts noted that the Oracle setback, combined with mixed semiconductor earnings, limited the KOSPI’s further descent[1].

Large‑Cap Korean Stocks Suffer Mixed Losses Core large‑cap stocks mostly fell: Samsung Electronics slipped 0.28% on Dec 18 and 0.65% on Dec 17, while LG Energy Solution plunged 8.9% and 6.74% respectively after a major supply‑deal cancellation[1][2]. Hyundai Motor declined around 1.2% both days, and Naver slid 0.87% on Dec 17, whereas SK hynix rose 1.09% on Dec 17, showing uneven sector reactions[2]. Trade volume reached 576 million shares, valued at 12.8 trillion won on Dec 18, highlighting robust market participation despite the downturn[1].

Won Gains Strength and Bond Yields Ease The Korean won appreciated to roughly 1,478.5 per U.S. dollar, up about 1.3‑1.5 won from the prior close, indicating currency resilience amid equity weakness[1][2]. Government bond prices rose as yields fell, with three‑year Treasuries at 2.967% and five‑year at 3.196% on Dec 18, reflecting a flight to safety[1]. Analysts linked the bond‑yield decline to the broader risk‑off sentiment triggered by AI‑valuation concerns[1].