Kospi, Kosdaq Hit Circuit Breakers for Second Straight Day as Korean Benchmark Slides Below 6,000

July 29: Seoul’s stock market was rattled by a fresh wave of selling on Wednesday, triggering marketwide circuit breakers for the second consecutive session and pushing the benchmark Kospi below the psychologically important 6,000 level for the first time in weeks, according to The Korea Times. 

Trading on both the Kospi and the tech-heavy Kosdaq was halted for 20 minutes as steep intraday losses forced the bourse operator to step in, marking an unprecedented run of back-to-back stoppages for the Kospi, The Korea Times reported. 

The Kosdaq was the first to trip a circuit breaker, with trading paused at 12:19 p.m. after the index tumbled 8 percent from the previous close. It was the first time this year the junior board had triggered breakers on two straight trading days. 

The Kospi followed shortly after. Despite opening 1.09 percent higher at 6,809.11, the index reversed sharply through the morning session, breaking decisively below 6,000 to trade at 5,535.53 by 12:47 p.m., according to Korea JoongAng Daily. Trading of Kospi-listed shares was subsequently halted for 20 minutes from 12:31 p.m. after the benchmark plunged more than 8 percent from Tuesday’s close. 

The sell-off was concentrated heavily in semiconductor and technology counters, as investors grew increasingly wary of the enormous capital expenditure global tech giants have committed to artificial intelligence infrastructure. Doubts over whether that spending will translate into near-term returns appear to have spooked traders already on edge after Tuesday’s rout, Korea JoongAng Daily noted. 

Wednesday’s halt was the eighth time this year that the Korea Exchange (KRX) has activated a circuit breaker, underscoring how volatile the market has become in recent sessions. The mechanism, designed to give investors a cooling-off period during extreme swings, is triggered automatically once an index falls 8 percent or more from its previous close, with trading paused for 20 minutes before resuming. 

Back-to-back circuit-breaker events are rare in Korean market history, and the fact that both the Kospi and Kosdaq were separately triggered on consecutive days has drawn particular attention from market watchers. Analysts point to a confluence of factors: profit-taking after a prolonged AI-driven rally, renewed scrutiny of stretched valuations among chipmakers, and broader jitters tied to global tech sentiment. 

Samsung Electronics and SK hynix, the two heavyweights that have anchored much of the Kospi’s gains this year on the back of the AI memory-chip boom, were among the hardest-hit counters as investors booked profits and reassessed the sustainability of the sector’s breakneck expansion. 

The scale of Wednesday’s decline has raised questions about whether the correction is a temporary shakeout after months of gains or the start of a deeper reassessment of AI-related valuations across Asian markets. Regulators and exchange officials have not signaled any additional intervention beyond the standard circuit-breaker protocol, though market participants will be watching closely for signs of stabilization when trading resumes. 

For now, the sharp reversal has wiped out weeks of gains in a matter of sessions, leaving investors bracing for more turbulence ahead. 

Source

• The Korea Times