South Korea's benchmark Kospi index plunged 8.18 percent to 7,392.04 on Tuesday as investors accelerated selling in technology stocks, particularly companies linked to the artificial intelligence boom. The sharp decline reflected growing concerns that valuations across the AI sector have become stretched after a strong rally this year.

The selloff was led by semiconductor heavyweights Samsung Electronics and SK Hynix. Samsung Electronics fell 9.3 percent despite reporting a 19-fold increase in profit, while SK Hynix declined 9.5 percent after initiating the marketing process for its proposed Nasdaq listing in the United States.

Market participants remain cautious over whether massive investments in AI chips, computing infrastructure, and data centres will translate into sustainable productivity gains and corporate profitability. The recent weakness suggests investors are reassessing risk exposure after months of strong gains in AI-related stocks.

SK Hynix is also seeking to raise approximately USD 28 billion through its proposed US listing, making the transaction a significant test of investor appetite for AI-focused companies amid heightened market volatility.

The weakness extended across regional markets. Japan's Nikkei 225 declined 1.8 percent, with chip equipment manufacturer Tokyo Electron falling 3.4 percent and Kioxia Holdings losing 10.7 percent. Hong Kong's Hang Seng Index slipped 0.4 percent, China's Shanghai Composite Index fell 1 percent, and Taiwan's Taiex declined 1.8 percent.

The broader technology selloff also affected global sentiment. The MSCI Asia Pacific Index dropped 1.7 percent, while Nasdaq 100 futures fell 1 percent, indicating weaker sentiment for technology stocks despite the previous session's gains on Wall Street.