South Korea’s stock market endured another punishing session on Thursday, with the KOSPI index sliding more than 6% in early trading and approaching the 8% decline threshold that would trigger an automatic circuit breaker — a temporary halt in trading designed to prevent panic selling. The index, which has now fallen for five consecutive days, was last seen at 2,210 points, its lowest level in over two years.
The rout was led by the country’s two largest semiconductor manufacturers, Samsung Electronics and SK Hynix, which tumbled 7.4% and 7.8% respectively. Analysts pointed to a combination of factors: weakening global demand for memory chips, escalating US-China trade frictions, and a sharp sell-off in US tech stocks overnight. The Nasdaq Composite fell 3.2% on Wednesday, its worst single-day drop since 2022, as investors rotated out of high-growth technology shares.
“The KOSPI is heavily weighted toward tech and particularly semiconductors, so it is acutely sensitive to any shift in the global chip cycle,” said James Park, an Asia market strategist at London-based brokerage Kepler Cheuvreux. “What we are seeing is a repricing of risk that is hitting export-dependent economies hardest.”
For UK investors, the turmoil in Seoul has direct implications. Many British pension funds and investment trusts hold allocations to emerging-market equities, with South Korea representing a significant share. The iShares MSCI South Korea ETF, popular among UK retail investors, has dropped nearly 12% this week alone. Meanwhile, the FTSE 100 opened 0.8% lower on Thursday, dragged down by mining and technology stocks, though the index remained relatively insulated compared to its Asian counterparts.
The South Korean finance ministry said it was monitoring the situation closely and stood ready to deploy stabilisation measures if needed. However, with no immediate catalyst to restore confidence, traders warned that further declines could test the circuit breaker limit in the coming days. The last time the KOSPI triggered a trading halt was in March 2020, during the Covid-19 pandemic.