South Korea First Rate Hike in Three and a Half Years: Korean Stock Losses Widen, KOSPI Slumps Over 6%, SK Hynix Tumbles Over 11%

TradingKey - The Bank of Korea's rate hike announcement triggered a stock market sell-off, with the KOSPI plunging 6%, Samsung Electronics falling over 8%, and SK Hynix plummeting over 11%.

During early Asian trading on July 15, the Bank of Korea (BOK) held its Monetary Policy Board meeting and officially announced a 25-basis-point hike in its benchmark interest rate to 2.75%. This is South Korea's first rate hike in three and a half years since January 2023, signaling an official departure from its prolonged period of easing and rate freezes, and the restart of a tightening cycle.

Following the announcement, panic immediately ignited in the financial markets, causing the sell-off in South Korean stocks to deepen. The KOSPI Index saw its decline widen from 4% at the open to 6.48%, trading at 6,812.41. Meanwhile, Samsung Electronics fell 8.23% to 256,500 won, and SK Hynix plummeted 11.53% to 1,842,000 won.

KOSPI Index chart, Source: TradingView

Yesterday, South Korean stocks surged over 7% on cooling U.S. inflation, even briefly triggering a buy-side circuit breaker intraday. Today, however, as the other shoe dropped with the rate hike, the stock market erased yesterday's gains. Yet, this may just be the beginning, as panic could continue to spread.