Leveraged Korea ETFs Tumble as Seoul Stocks Dive; Democratic Sweep May Slow AI Infrastructure Expansion

Stock News10:37

Leveraged South Korean equity ETFs plunged sharply, with the CSOP SK Hynix Daily Leveraged (2x) Product (07709) dropping 12.98% to HK$18.97 and the CSOP Samsung Electronics Daily Leveraged (2x) Product (07747) falling 9.13% to HK$42.80 as of press time.

South Korean stocks opened lower this morning and swung into correction territory, at one point shedding 5%. Among individual names, SK Hynix fell more than 7%, while Samsung Electronics declined more than 5%.

Fears that a decisive Democratic victory in the U.S. midterm elections could lead to tighter regulation of AI data center construction weighed on sentiment. Overnight, the Philadelphia Semiconductor Index dropped 3.13%, hitting a six-month low.

Keith Parker, head of global macro equity strategy and U.S. equity strategy research at UBS, wrote in a report that exit polls show voters strongly oppose building new data centers in their communities. This "blue wave" will have an impact on the stock market, and the biggest near-term effect may come from tighter state-level regulation of data centers.

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