South Korea's KOSPI Tumbles 7.2% on Tech Rout, Nears Trading Halt Threshold

South Korea's benchmark stock index plunged on Thursday, driven by a severe sell-off in major technology stocks that pushed the market to the brink of a mandatory trading halt. The KOSPI index tumbled 7.2%, nearing the threshold for a market-wide circuit breaker as investor sentiment soured on the chipmaking sector.

Tech Heavyweights Drive Market Plunge

The sell-off was concentrated in the technology sector, with investors unwinding positions in AI-related semiconductor stocks amid concerns over stretched valuations and renewed geopolitical tensions, according to a report from Investing.com. The index's heavyweight chipmakers led the losses, amplifying the broader market's decline.

Key decliners included:

• SK Hynix Inc (KS:000660), which fell 10.3%
• Samsung Electronics Co Ltd (KS:005930), which dropped 8.2%

Market Safeguards Activated

The steep decline brought the KOSPI close to the 8% drop from the previous day's close that would trigger a market-wide circuit breaker. A circuit breaker temporarily suspends all trading on the exchange to allow investors to reassess market conditions and prevent panic selling.

Ad

Earlier in the session, the Korea Exchange had already activated a "sell-side sidecar," a less severe measure that temporarily halts program trading orders for five minutes. This was triggered after KOSPI 200 futures fell more than 5% and remained at that level for at least one minute.

Regional Sector Weakness

The weakness extended beyond South Korea, hitting other technology and manufacturing hubs in the region. Japanese companies within the Apple supply chain also came under significant pressure, reflecting broad-based investor concern across the sector.

Notable losses in Japan included:

• Kioxia Holdings Corp (TYO:285A) down 13.4%
• Murata Mfg Co (TYO:6981) falling 4.4%
• TDK Corp (TYO:6762) losing 3.2%