Samsung Electronics and SK Hynix, which command over half the index’s market capitalization, led the retreat with respective losses of 6.3% and 5.7%. These drops follow a pattern of heavy liquidation seen in the previous session. While the broader market, including defense and retail sectors, also faced downward pressure, officials identified the concentrated reliance on chipmakers as the central driver of current volatility.
In section Market Quotes
Kospi Enters Bear Market as Chip Stocks Fuel Investor Exit
A 23% slide from June’s peak has pushed South Korea’s benchmark Kospi into bear market territory, as a brutal selloff in heavyweight semiconductor stocks wiped out 5.3% of the index’s value on Wednesday. The crash forced the Korea Exchange to trigger emergency trading halts to stem the bleeding.
Finance Minister Koo Yoon-cheol and Bank of Korea Governor Shin Hyun-song convened with regulators on Wednesday to address the turbulence. Authorities attributed the panic to a combination of profit-taking, portfolio rebalancing by institutional investors, and deepening skepticism regarding the long-term sustainability of the artificial-intelligence boom. Despite Samsung projecting a 19-fold surge in second-quarter operating profit, investors seized the earnings report as an opportunity to lock in gains rather than commit further capital. Even with the recent double-digit declines, Samsung shares remain up 130% for the year, underscoring the severity of the current correction following a prolonged rally.
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