South Korea's benchmark Kospi index dropped sharply on Thursday, falling 4.58% to slip below the 6,300-point mark during trading, according to the Hankyoreh. The decline triggered a sell-side circuit breaker, a mechanism designed to pause trading during rapid market drops.
The sell-off was led by a steep decline in SK Hynix, which plunged 8% on the day, the Hankyoreh reported. The circuit breaker was activated for the second time in as many days, following a similar intraday halt on Wednesday.
The Kospi's slide came as foreign and institutional investors unloaded shares, according to Money Today. The selling pressure hit both major Korean exchanges, though the tech-heavy Kosdaq showed relative resilience, edging up 0.26% during the same session.
The market turbulence follows a period of weakness in major semiconductor stocks, with both SK Hynix and Samsung Electronics under pressure, Money Today noted. The move marks a reversal from recent strength in U.S. markets, which had provided a tailwind for Korean equities.
The trigger level for the sell-side circuit breaker was hit as the Kospi fell more than 5% in a single session, according to a report from v.daum.net. The mechanism halts program trading for a set period to allow investors to reassess positions.
Analysts cited by YTN pointed to leveraged trading as a factor amplifying the downturn, with some retail investors expressing reluctance to re-enter the market after taking losses.
Investors will be watching whether the Kospi can stabilize above the 6,300 level in the coming sessions, and whether foreign selling pressure eases.
