South Korea's KOSPI Crashes 10% In Single Session

South Korea's benchmark KOSPI index suffered one of its worst single-session declines on Tuesday, June 23, closing down nearly 10% as a wave of profit-taking and heavy foreign selling overwhelmed the market.

Circuit Breaker Triggered as Losses Deepened

The Korea Exchange activated a market-wide circuit breaker at around 2:33 p.m. local time after the index fell more than 8% from the previous session's close, halting all stock trading for 20 minutes. Losses continued to mount after the resumption, with the benchmark closing down 910.71 points, or 9.99%, to settle at 8,203.84. It marked the fourth time this year and the tenth time on record that the KRX has triggered a full market halt.

Samsung Electronics and SK Hynix, the two heavyweights that together dominate the index, bore the brunt of the selling. Samsung fell more than 12%, closing at 310,000 won, while SK Hynix tumbled approximately 12.5% to 2.555 million won. The timing is notable: SK Hynix had only the previous session overtaken Samsung Electronics to claim the top spot in KOSPI market capitalisation, a milestone that at least one analyst had earlier flagged as a potential signal of the bull market's end.

Stretched Valuations and Retail Leverage in Focus

Analysts pointed to a combination of factors behind the sharp reversal. The KOSPI had staged an extraordinary rally in the months prior, driven almost entirely by enthusiasm around artificial intelligence and semiconductor stocks. That concentration created structural fragility: Samsung and SK Hynix together account for more than 50% of the index's total market capitalisation, leaving little buffer when both stocks sold off simultaneously.

VK Vijayakumar, chief investment strategist at Geojit Financial Services, cited stretched valuations in AI and semiconductor-linked stocks alongside elevated retail leverage in the system as key fault lines. Retail investors had accumulated significant margin debt during the rally, amplifying the downside once sentiment turned.

Foreign investors added to the pressure. According to data from the Korea Exchange, foreign and institutional investors sold a net 4.13 trillion won and 4.55 trillion won respectively in the session, while retail investors stepped in as net buyers to absorb some of the flow. Broader macro sentiment also weighed on markets, with the tech-heavy Nasdaq falling 1.3% overnight amid renewed concerns over major technology companies.

Sources:
Korea Herald: Kospi crashes nearly 10% on massive tech sell-offs
Business Standard: South Korea's KOSPI crashes 10% after record rally
Seoul Economic Daily: Brokerage report predicting bull market's end resurfaces as KOSPI plunges 10%