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Asian Markets Slide: KOSPI and TAIEX Fall 3.59% as Japan Stays Shut for Culture Day

By Beauty of Bharat · Published 4 November 2026

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What makes two markets, hundreds of kilometres apart, finish a trading day down by exactly the same percentage? On Tuesday 3 November 2026, Seoul's KOSPI and Taiwan's TAIEX both closed 3.59% lower, and the shared number was no coincidence: both markets are heavily weighted towards the chipmakers and technology suppliers now caught in a global argument about whether enormous spending on artificial intelligence infrastructure will pay off quickly enough. Tokyo, the region's other giant market, sat the day out entirely, closed for Culture Day, leaving investors to watch the sell-off unfold without a Japanese session to cushion or confirm it.

Seoul: a morning recovery that faded into a sharp close

Seoul opened on the back foot and never really recovered. The KOSPI opened 2.46% below its previous close, fell to around 5,638 during the morning, then steadied for a time as retail buyers stepped in. A midday report put the index at 5,638.88 as of 04:32 UTC, down 220.20 points or 3.76% at that snapshot. By the afternoon, however, selling had reasserted itself, and the index closed at 5,648.79, down 210.29 points or 3.59% from the previous trading day. The close mattered for another reason: it wiped out the previous session's rebound, when the KOSPI had closed at 5,859.08, up 128.34 points or 2.24% on Monday 2 November.

The selling was led by the chip giants at the heart of the index. Samsung Electronics closed at 219,500 won, down 4.15%, while SK hynix closed at 1,398,000 won, down 5.03%, according to Yonhap's closing report. Losses spread well beyond the two names, reaching steel, batteries, oil refining and other large companies, while only a handful of heavyweights, including Hanwha Aerospace and Samsung Biologics, managed gains in afternoon trading. The smaller-company KOSDAQ index had a worse day still, closing at 704.39, down 29.97 points or 4.08%, only just holding above the 700 mark after trading in a range between 702.34 and 723.92.

Trading flows told a clear story about who was selling and who was buying. Foreign investors sold a net 1.52 trillion won of shares on the main board, and institutions sold a net 511.3 billion won, while individual retail investors bought a net 1.66 trillion won. That retail buying absorbed part of the morning decline but did not stop the index from closing sharply lower. Decliners beat gainers by 656 to 220 on the main board, and total trade was light at 192.4 million shares worth 14.1 trillion won.

Taipei: the seventh-steepest point fall on record

Taiwan's session followed a similar arc, only steeper in points terms. The TAIEX, the Taiwan Stock Exchange's benchmark index, ended the day at 43,307.54, down 1,612.60 points or 3.59% from Monday's close of 44,920.14. During the session it traded between 43,191.58 and 44,614.64. A midday snapshot had put it at 43,592.37, down 1,327.77 points or 2.96%, after it had dipped below 43,400 intraday, so the afternoon took the index lower still. Focus Taiwan, citing dealers, reported that the fall was the seventh-steepest single-session point decline in the index's history, a ranking measured in points rather than in percentage terms.

As in Seoul, chip and electronics shares did most of the damage. Taiwan Semiconductor Manufacturing Co., the contract chipmaker that accounts for more than 40% of the market's total value, fell 1.50% to close at NT$2,295.00, contributing about 280 points to the TAIEX decline on its own. Other semiconductor names fell further: smartphone chip designer MediaTek shed 7.43% to close at NT$3,675.00, a much larger fall than the 6.42% decline shown in the midday snapshot, while packaging and testing provider ASE Technology Holding slid 8.61% to close at NT$816.00. The pattern was familiar from Seoul: the biggest, most widely held technology names fell first, and the selling then spread across related suppliers.

The trigger, as dealers described it, came from overnight trading in the United States rather than from any single announcement in Taipei. United States technology shares had fallen on Monday, with the Nasdaq Composite down 1.07%, the S&P 500 down 0.51% and the Philadelphia Semiconductor Index down 3.37%. Against that backdrop, dealers pointed to lingering doubts about the scale of artificial intelligence spending, how it is being financed, and how quickly it will generate returns. Caution ahead of the United States midterm elections, with voting taking place on Tuesday local time, was also cited as a reason for investors to hold back.

Mainland China and Hong Kong: a split day

Not every market in the region fell, and the contrast between mainland China and Hong Kong was one of the day's more interesting details. In mainland China, the Shanghai Composite dipped below 3,600 at one point during the morning and ended the morning session at 3,612.09, down 0.71%. The Shenzhen Component slipped 0.16% to 10,993.07 in the morning session, and the CSI 300 eased 0.08% to 4,013.89. By the close, the Shanghai Composite was reported at 3,608.10, down 0.82%, a level described in one overnight summary as a one-week low. Reports attributed the mainland weakness in part to disappointment that market-support measures announced earlier had not lifted sentiment further, with technology shares leading the decline.

Hong Kong moved the other way. The Hang Seng Index opened 76 points higher at 23,469, rose as much as 152 points to a high of 23,545, and finished the morning session up 121.68 points at 23,515, with half-day turnover of HK$115.27 billion. By the full close it was reported at 23,525.97, up 0.57%. The divergence is a useful reminder that a regional sell-off is rarely uniform: Hong Kong's morning strength, helped by gains in technology services, retail and consumer-related shares in early trading reports, stood in sharp contrast to the technology-led declines in Seoul and Taipei, even though all three markets were reacting to the same overnight news from Wall Street.

Why chip shares led the fall

The common thread running through Seoul and Taipei is concentration. Both indexes lean heavily on a small number of chip and electronics companies, so when global investors reassess technology valuations, those markets feel it first and hardest. In Seoul, Samsung Electronics and SK hynix are the bellwethers; in Taipei, TSMC alone accounts for such a large share of market value that a 1.50% fall in its shares translated into roughly 280 points of the TAIEX decline. When the Philadelphia Semiconductor Index falls more than 3% overnight, as it did before Tuesday's Asian session, suppliers across South Korea and Taiwan tend to open lower, and Tuesday was no exception.

The deeper question behind the selling is about returns, not about whether artificial intelligence matters. Reports from Seoul and Taipei consistently framed the concern the same way: investors doubted the productivity and profitability of excessive spending on artificial intelligence infrastructure, particularly given some recent disappointing earnings reports from global technology companies and the financing burden of building ever-larger data centres. That is a debate about timing and payback, and it can move markets sharply in both directions, as Monday's 2.24% rebound in Seoul showed.

Context and what to watch

Tuesday's falls need context before they are read as a verdict on Asia's economies. A single-day index move, even a steep one, is a measure of investor sentiment on that day, not a report on factory output, employment or company profits, and this article deliberately keeps the markets story separate from other economic releases. The KOSPI's close of 5,648.79 also sits well above where it ended 2025, and both Seoul and Taipei had seen sharp moves in both directions in the days around Tuesday, including Seoul's rebound on Monday. Sharp point falls also look dramatic in markets whose index levels are now very high: a 1,612-point fall in Taipei is historically large in points, but at 3.59% it is not the largest percentage fall on record, which is why the seventh-steepest ranking should always be quoted with the words point decline attached.

Japan's absence from Tuesday's trading is part of the context too. The Tokyo cash market was closed for Culture Day, a national holiday listed in the Japan Exchange Group's 2026 market calendar for Tuesday 3 November, with no trading in the Nikkei 225 or the TOPIX. The Nikkei's last session before the holiday, on Monday 2 November, had closed at 63,081.86, down 208.25 points or 0.33%. Regular trading was scheduled to resume on Wednesday 4 November, when Tokyo investors would have to absorb two days of overseas news, including the United States midterm voting, in a single session. That catch-up session, rather than Tuesday's closed market, is where Japan's response to the sell-off will first be visible. This article is a market report, not investment advice, and readers should not treat a one-day move as a signal to buy or sell.

What to watch next

Watch Tokyo's reopening on Wednesday 4 November first, since it will show whether Japanese investors join the selling or treat Tuesday's falls elsewhere as a buying opportunity. Then watch whether foreign selling in Seoul eases or continues, and whether Taiwan's chip heavyweights stabilise, since both will signal whether Tuesday was a one-day reassessment or the start of a longer retreat from technology shares.