KOSPI plunges 8%, triggers market circuit breaker

TradingKey - Seoul’s equity market suffered its sharpest shock on Wednesday morning, with panic spreading quickly after the opening bell. The benchmark KOSPI Index tumbled more than 5% within minutes of the open, breaching the key 5,500-point psychological threshold.

At around 10:22 a.m., the KOSPI extended losses to 8%, prompting a 20-minute trading halt under Korea Exchange’s circuit-breaker mechanism. The exchange also activated the “Sidecar” — a temporary suspension of program trading — to curb excessive volatility.

The sell-off followed a steep 7.24% drop in the previous session, marking a continued collapse in investor confidence. Heavyweight stocks Samsung Electronics and SK Hynix each slumped more than 3%, dragging the benchmark to its lowest level in 19 months.

Analysts pointed to escalating tensions in the Middle East as the immediate catalyst. The deepening U.S.-Iran conflict and Tehran’s threat to block the Strait of Hormuz have stoked fears over global energy security. For South Korea — a manufacturing hub heavily reliant on imported energy — near $100-per-barrel oil prices pose a major economic blow.

Meanwhile, turmoil in the foreign-exchange market compounded the pressure. The won weakened past 1,500 per U.S. dollar for the first time since the 2009 global financial crisis, accelerating capital outflows. The sharp depreciation leaves the Bank of Korea trapped between fighting inflation and supporting growth.

As trading resumed, uncertainty continued to hang heavily over the Seoul market, with investors bracing for further volatility.