Kospi Plunges More Than 8% at Open, Triggers Circuit Breaker

Kospi Falls Below 8,000

Won-Dollar Exchange Rate Opens Sharply Higher

South Korea’s Kospi plunged more than 8% in early trading on June 8, falling to the 7,400 level. The slide followed a sharp selloff in U.S. semiconductor stocks after Broadcom’s earnings outlook disappointed investors, prompting the Korea Exchange to trigger a Level 1 circuit breaker shortly after the open.

As of 9:09 a.m., the Kospi had fallen 683.13 points, or 8.37%, from the previous session to 7,477.46. The Kospi 200 dropped 110.58 points, or 8.53%, to 1,186.44.

The Korea Exchange triggered a Level 1 circuit breaker on the main board shortly after trading began. The mechanism is activated when the Kospi falls at least 8% from the previous close and stays there for more than one minute. Once triggered, trading in all stocks is halted for 20 minutes.

In U.S. trading on June 5, semiconductor shares tumbled after investors concluded that growth in Broadcom’s artificial intelligence chip business fell short of market expectations. The Philadelphia Semiconductor Index sank 10.3%, marking its biggest drop since March 2020.

At that time, foreign investors were net sellers of 240.1 billion won on the main board, while institutions sold a net 68.7 billion won. Retail investors were net buyers of 304.6 billion won.

Large-cap stocks fell across the board. Samsung Electronics lost 9.27% and SK Hynix dropped 8.02%. SK Square fell 11.53%, Hyundai Motor slid 10%, Samsung Electro-Mechanics lost 9.16%, Samsung Life Insurance sank 14.91%, Samsung C&T dropped 12.27%, and Hyundai Mobis fell 12.05%.

The Kosdaq also tumbled. As of the same time, the index was down 61.34 points, or 6.12%, at 941.10. It had already fallen more than 4% just after the open, dropping below 1,000, and extended those losses.

On the Kosdaq market, foreign investors were net buyers of 156.9 billion won and institutions bought a net 10.5 billion won, while retail investors were net sellers of 146.8 billion won.

Most of the Kosdaq’s largest stocks were also lower. Alteogen fell 6.92%, EcoPro BM dropped 7.05%, EcoPro lost 8.23%, Rainbow Robotics slid 6.14%, HLB fell 4.84%, and Samchundang Pharm declined 7.71%.

The won-dollar exchange rate opened sharply higher. In Seoul trading, the won weakened 16.1 won to 1,555.2 per dollar from the previous session. That was the highest level since March 2009, during the global financial crisis.

Kim Yeon-ji, Hankyung.com reporter kongzi@hankyung.com