South Korea's KOSPI Plunges 6.43% as Chip Stocks Trigger Trading Halt

South Korea's main stock index fell sharply below the 8,000-point threshold on July 2, prompting the Korea Exchange (KRX) to activate a sell-side sidecar mechanism within minutes of the opening bell. The benchmark KOSPI had shed 534.25 points, or 6.43%, to reach 7,769.16 by 9:51 a.m. local time, with heavy selling concentrated in semiconductor-related equities.

The KRX suspended program trading on KOSPI-listed shares for five minutes following the trigger. Under exchange rules, a sell-side sidecar activates automatically when KOSPI 200 futures decline 5% or more for a continuous period of at least one minute. The index opened the session 4.46% lower and continued falling throughout the early morning.

Thursday's halt is one of many recorded in 2026. By late June, the KRX had already logged close to 30 sidecar activations and five circuit breaker events for the year. Both figures have already surpassed the previous annual record set during the 2008 global financial crisis, when the KOSPI recorded 26 sidecar halts over the entire calendar year. Total volatility in 2026 has exceeded any comparable period since that crisis.

Samsung Electronics and SK Hynix, which together account for roughly half of the KOSPI's total market capitalization, led the declines again on Thursday. Their losses extended a broader global selloff in chip stocks that began on Wall Street during the prior session.

The Nasdaq Composite slid 0.66% on Wednesday. The VanEck Semiconductor ETF dropped 5.4% during the same session. Micron Technology and Sandisk each posted declines exceeding 10%, adding pressure on Asian chipmakers at the open of Thursday's trading.

The Thursday selloff reversed part of a chip-driven rally that had pushed the KOSPI to record highs earlier in 2026. Despite the repeated bouts of sharp selling, semiconductor stocks continue to dominate the index's composition and remain the primary driver of its intraday swings. Market participants are watching whether Thursday's losses will deepen or stabilize in line with the rapid reversals seen at multiple points earlier this year.