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Chip selloff drags emerging-market stocks to lowest level since mid-April

The MSCI developing-world benchmark fell 3.5% by midday New York time, while South Korea’s Kospi dropped nearly 11% amid trading suspensions.

Reported · Written up by our desk · Emerging Markets

A selloff in semiconductor stocks weighed on Asian trading and pushed an emerging-market benchmark to its lowest intraday level since mid-April, according to LiveMint Markets, citing Bloomberg. The MSCI Inc. index of developing-world stocks was down 3.5% as of 12:00 p.m. in New York Tuesday.

The drop in technology-linked shares offset gains in Latin America equities, while markets in parts of Europe recorded only modest declines. Oil slipped below $85 a barrel as traders factored signs of deescalation in Middle East tensions, with currencies in the region reacting in mixed ways.

Latin America’s exposure to artificial intelligence-linked stocks appeared lower than Asia’s, a strategist said, while some energy-sensitive currencies could still be pressured by weaker crude. In Chile, the peso rallied 0.6%, outperforming other Latin American peers, as investors weighed the implications for the region’s growth and currency outlook.

The semiconductor weakness also spilled into South Korea, where multiple chip-related sectors were hit, including a series of trading suspensions on Tuesday. LiveMint Markets reports the Kospi Index plunged nearly 11%, with Samsung Electronics and SK Hynix down more than 13% each, and trading volume in the Direxion Daily MSCI South Korea Bull 3X ETF spiking to as much as five times its daily average at points.

Latest closeWTI crude $95.27 ▲3.4%|Kospi 7,080.92 ▲1.0%

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