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2026-07-13 15:29:46
[South Korea's KOSPI Index Plunges Nearly 9%, Samsung Electronics and SK Hynix Suffer Heavy Losses] 1. South Korea's KOSPI index plunged 8.95% on Monday, marking one of its biggest single-day drops in recent years. Tech giants Samsung Electronics and SK Hynix fell 10.7% and 15.3% respectively, becoming the main drag on the market. During trading, the Korea Exchange triggered a circuit breaker due to the index's 8% drop, suspending algorithmic trading for 20 minutes. 2. This plunge was triggered by a confluence of negative factors: escalating geopolitical conflicts in the Middle East, obstructed passage through the Strait of Hormuz pushing up oil prices and reigniting inflation concerns; rising market expectations for a Federal Reserve rate hike this year; and concerns about high valuations stemming from the recent AI investment boom, putting immense selling pressure on the semiconductor sector. 3. Samsung Electronics and SK Hynix together account for over 60% of the KOSPI's weighting, a highly concentrated market structure that means any large-scale capital outflow could trigger a systemic sell-off. Goldman Sachs had previously warned that if the combined weighting of the two companies continued to rise, it could trigger a significant outflow of funds from the South Korean market by foreign investors. 4. The South Korean stock market has experienced a rollercoaster ride this year. Previously, the index reached a record high driven by the global AI investment boom, but it has fallen sharply from its peak within just a few weeks, reflecting a reassessment of the semiconductor industry's cyclical nature and valuations.
