- June 26, 2026
Why Has South Korea’s Kospi Plunged 8.4% To Trigger 20-Minute Circuit Breaker?
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South Korea’s benchmark Kospi index tumbles 8.4% on Friday, triggering a 20-minute trading halt after a sharp sell-off in technology stocks rattled investors.
The steep fall was driven by a combination of profit booking, concerns over the sustainability of the artificial intelligence (AI) rally, and heavy selling by foreign investors.
South Korea’s benchmark Kospi index tumbled 8.4% on Friday, triggering a 20-minute trading halt after a sharp sell-off in technology stocks rattled investors. The decline wiped out the previous session’s gains and marked the second time this week that the Korea Exchange activated a circuit breaker.
The steep fall was driven by a combination of profit booking, concerns over the sustainability of the artificial intelligence (AI) rally, and heavy selling by foreign investors.
Why did the Kospi fall so sharply?
1. AI-related tech stocks led the sell-off
Technology giants bore the brunt of the decline, with Samsung Electronics and SK Hynix plunging more than 9% each. Both companies have been among the biggest beneficiaries of the AI-driven semiconductor boom, making them vulnerable to profit-taking after strong gains.
2. Global AI rally faces fresh scrutiny
Investor sentiment weakened after signs that the AI boom could face rising costs and slower momentum. Apple’s decision to raise prices on several MacBook and iPad models due to higher memory chip costs highlighted the inflationary impact of soaring semiconductor demand.
“The rapid expansion of AI data centres has created an extraordinary surge in demand for memory and storage. We have never seen a component price increase this much, this quickly. We have shielded our customers from these increases so far, but we have now reached a point where we need to begin raising prices on a number of products, including today’s increases for iPad and Mac. We know this is not welcome news, and we are working tirelessly to find solutions,” Apple said in a statement.
Concerns also emerged that OpenAI could delay its planned initial public offering until next year, dampening enthusiasm for AI-related investments.
3. Heavy foreign investor selling
Foreign investors sold about 2.7 trillion won ($1.7 billion) worth of Kospi shares during the morning session, accelerating the market’s decline and increasing selling pressure across large-cap stocks.
4. Profit booking after Thursday’s rally
The sell-off followed a strong rally in the previous session, when upbeat earnings guidance from Micron Technology and optimism surrounding SK Hynix’s planned US listing had lifted semiconductor stocks. Friday’s decline reflected investors locking in profits after those gains.
Why was trading halted?
The Korea Exchange suspended trading in the Kospi for 20 minutes after the benchmark index fell sharply enough to trigger a market-wide circuit breaker. Such measures are designed to temporarily pause trading during periods of extreme volatility, giving investors time to assess market conditions before trading resumes.
How did other Asian markets perform?
The weakness spread across the region as investors reduced exposure to technology shares. Japan’s Nikkei 225 fell 5%, Hong Kong’s Hang Seng lost 1.9%, Shanghai Composite declined 2.1%, Taiwan’s Taiex dropped 3.3%, and Australia’s S&P/ASX 200 was largely flat.
About the Author
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalis…Read More
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