South Korea’s benchmark KOSPI index tumbled 5.8% on Wednesday, triggering the exchange’s sell-side sidecar mechanism and briefly halting algorithmic trading after a sweeping semiconductor selloff rattled Asia’s most tech-concentrated market.
The index fell 398.66 points to close at 6,471.17, after touching an intraday low of 6,400.81. The Korea Exchange activated the sidecar shortly after the market opened, suspending program trading of KOSPI-listed stocks for five minutes when KOSPI 200 futures dropped more than 5% within a single minute, according to UA News.
Chipmakers Lead the Rout
Samsung Electronics shares fell 7.82% to close at 247,500 won, while SK Hynix dropped 9.75% to 1.5 million won. SK Square, the holding company that owns a controlling stake in SK Hynix, suffered an 11.54% decline. Samsung Electro-Mechanics fell 3.68%. The declines were broad-based, with 700 stocks falling versus just 171 advancing.
Daishin Securities analyst Lee Kyung-min attributed the selling to renewed concerns about semiconductor prospects as global bond yields climb, raising the cost of capital and dampening the AI investment thesis that had powered the KOSPI to record highs above 6,300 earlier this year. Foreign investors dumped a net 348.8 billion won in shares, while institutional investors sold a net 132.4 billion won. Retail investors stepped in as buyers, purchasing a net 463.6 billion won.
Volume Spikes as Risk-Off Sentiment Spreads
Trading volume surged to 302.07 million shares worth 22.94 trillion won, roughly $16.4 billion, as investors rushed to reduce exposure. The South Korean won weakened to 1,397.7 per dollar, up 14.1 won from the previous close, reflecting broader capital outflows from Asian risk assets.
The sell-off was part of a wider retreat across the Asia-Pacific region, with MSCI’s Asia-Pacific ex-Japan index dropping over 3% and Taiwan’s TAIEX plunging more than 6% in its worst session since last year’s tariff shock. Rising oil prices from Middle East tensions and a global bond rout that pushed the US 30-year Treasury yield to a 19-year high added to the pressure on energy-importing Asian economies.
One bright spot was Hanwha Aerospace, which rose 2.71% after its US subsidiary secured a contract to supply prototypes of the K9 self-propelled howitzer to the US Army, demonstrating that defense-focused names can outperform even during a broad tech rout.
Sources: UA News; Korea Herald; investingLive; Global Economy Briefing
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