South Korea’s stock market hit a rough patch on Thursday, with the benchmark Kospi plunging 7.49% as technology stocks came under heavy selling pressure. The rout spread across Asian markets, prompting the country’s exchange operator to trigger a five-minute trading halt on programme sell orders after a sharp drop in index futures.The KOSPI dropped 450.02 points to 5,558.79, putting it on course for a seventh consecutive session of losses, its longest losing streak since September 2024. The index has fallen nearly 35% from its record high in June.The pressure on Asian equities followed a technology-led sell-off on Wall Street after US consumer price inflation accelerated more than expected in September. The data fuelled concerns that the Federal Reserve could raise interest rates later this year, putting technology companies and AI-related stocks under further pressure.MSCI’s broadest index of Asia-Pacific shares outside Japan fell 3.3%, while Japan’s Nikkei 225 declined 4.8%. S&P 500 e-mini futures were down 0.5%.
Samsung, SK Hynix lead South Korean market rout
Major technology companies accounted for some of the steepest losses on the South Korean exchange. Samsung Electronics shares fell 9.05%, while SK Hynix dropped 11.06%, reflecting the broader weakness across Asia’s semiconductor supply chain.Battery maker LG Energy Solution lost 3.44%. Hyundai Motor declined 3.99%, while sister automaker Kia Corp fell 2.03%.The selling extended to other Asian technology companies. Taiwan Semiconductor Manufacturing Company (TSMC) fell 2%, while Japan’s memory chipmaker Kioxia Holdings plunged more than 11%. SoftBank Group, an investor in AI, declined 9.4%.Market breadth in South Korea remained heavily negative. Of the 889 stocks traded, 768 declined and 90 advanced. Foreign investors sold shares worth a net 355.6 billion won.The won, meanwhile, strengthened 0.21% to 1,339.5 per dollar on the onshore settlement platform, compared with its previous close of 1,342.3.
‘Sidecar’ triggered
The sharp decline prompted the South Korean exchange operator to activate a sell-side “sidecar”, an automatic mechanism designed to temporarily cool trading during periods of heavy selling. The measure suspends program sell orders for five minutes after steep losses in index futures.The trigger came as the KOSPI extended its decline to seven consecutive sessions. The benchmark has now shed nearly 35% since its June record, with retail investors among those hit hardest during a sell-off in July, when the index fell around 20%. Losses in highly leveraged single-stock exchange-traded funds (ETFs) contributed to the damage during that period.The sell-off in Asia followed Wall Street’s third consecutive session of losses. The S&P 500 declined 1.1% overnight, while the Nasdaq Composite fell 1.9%. A gauge of semiconductor stocks recorded its sixth straight day of losses as investors reassessed the outlook for companies sensitive to borrowing costs.Meanwhile, in South Korea’s bond market, December futures on three-year treasury bonds rose 0.12 point to 103.00. The yield on the most liquid three-year Korean treasury bond fell 3 basis points to 3.855%, while the benchmark 10-year yield declined 2.1 basis points to 4.224%.Oil prices also moved lower, with Brent crude falling 1.7% to $104.20 a barrel. Traders weighed the potential impact of US sanctions relief on oil supply against attacks on shipping through the Strait of Hormuz.