SK Hynix and Samsung Electronics Hammered as KOSPI Plunges Over 5%, Triggering Sidecar Halt

TradingKey - Sharp declines in SK Hynix and Samsung dragged the KOSPI down over 5%, triggering a sidecar mechanism to cool down program selling.

On October 30, the South Korean stock market suffered a "Black Friday" rout. The Korea Composite Stock Price Index (KOSPI) opened lower with a gap today, with losses expanding out of control. Plunging over 5% intraday, the index suffered a bloodbath, breaching the key 5,700-point psychological mark to trade temporarily at 5,616.95.

KOSPI chart, source: TradingView

As the main KOSPI 200 futures contract plummeted over 5% during morning trading and stayed down for more than 1 minute, the Korea Exchange (KRX) urgently triggered a sell-side protection mechanism in the morning, forcibly suspending program sell orders for 5 minutes to curb a cascading panic caused by quantitative hedge funds and automated stop-loss selling.

The main trigger for the South Korean stock bloodbath and the sidecar circuit breaker was U.S. mega-cap tech earnings, which sparked global CapEx concerns and ROI anxiety. South Korea's two market heavyweights, SK Hynix and Samsung Electronics—monopolistic suppliers of global High Bandwidth Memory (HBM)—saw their high valuations, built entirely on unlimited CapEx budgets from U.S. CSP giants, undergo a sharp valuation correction. As of press time, Samsung Electronics was down over 6%, and SK Hynix plunged nearly 9%.

Today's heavy-volume bloodbath included extreme risk-off portfolio rebalancing by multinational capital ahead of the November 3 U.S. midterm elections. Once the election results are settled and political uncertainty dissipates, whether sideline capital is willing to re-enter the market around SK Hynix's valuation moat will be key to whether South Korean stocks can stem their slide.