South Korea’s Kospi Halts Trading After 8% Plunge; SK Hynix Slides 12%

South Korea’s KOSPI stock market halted trading for 20 minutes on July 13 following a sharp 8% decline, reflecting intense volatility in local equities.

The sell-off erased approximately $328 billion in market capitalization, marking one of the steepest single-day drops in recent memory.

Over the past two weeks, the index has lost nearly 25%, illustrating the fragility of investor sentiment amid AI-driven tech rallies and geopolitical concerns.

Tech shares bore the brunt of the sell-off. SK Hynix Inc., a leading memory chip maker, fell 12% in Seoul trading, despite the company’s US-listed American depositary receipts (ADRs) having surged 13% during their Friday debut.

Analysts attributed the sharp local drop to profit-taking, noting that the ADR listing had largely priced in expectations for the company’s $26.5 billion offering.

SK Hynix has gained attention as a major supplier of high-bandwidth memory (HBM) chips for AI processors, including Nvidia Corp.’s platforms, and its shares have risen more than 25-fold since the end of 2022.

However, leveraged ETFs and heightened market expectations for AI growth have contributed to increased volatility in the stock.

Analysts from Korea Investment & Securities noted that Hynix’s operating profit may underperform consensus by 8% due to slower HBM price gains compared to conventional memory.

The broader tech sector was impacted as well, with Samsung Electronics shares declining as much as 9.8%.

Futures for the Nasdaq 100 dropped 1.1%, and European equities were set to open down about 1%, signaling a global risk-off sentiment.

Cryptocurrency markets also followed suit, with Bitcoin slipping more than 2% to roughly $62,800.

Geopolitical developments further dampened investor confidence. The US military conducted strikes against Iranian targets in response to drone and missile attacks on US allies and civilian vessels in the Strait of Hormuz.

Rising oil prices have renewed concerns over inflation, prompting market participants to monitor upcoming US inflation data and anticipate potential Federal Reserve rate adjustments. Fed Chair Kevin Warsh is set to address Congress this week, providing further guidance on monetary policy.

The recent turbulence in South Korea’s market underscores the challenges posed by highly priced AI stocks, leveraged ETFs, and macroeconomic and geopolitical uncertainty.

The KOSPI has triggered 13 circuit-breakers since 2000, with seven occurring in 2026 alone, reflecting persistent volatility in the memory and technology sectors.