South Korea's KOSPI Plummets Amid Middle East Tensions and Chip Stock Selloff

On July 13 2026 South Korea’s benchmark KOSPI index fell sharply, losing about 5.3 % (392.5 points) to 7,083.4 and later triggering a temporary trading curb after a 9 % intraday decline. The sell‑off was led by semiconductor giants SK Hynix and Samsung Electronics, which dropped roughly 9‑10 % and 5‑6 % respectively, marking SK Hynix’s biggest one‑day fall on record after its recent Nasdaq debut.

The market weakness coincided with renewed U.S.–Iran hostilities in the Strait of Hormuz, prompting investors to off‑load heavyweights amid heightened geopolitical risk and concerns that AI‑driven chip valuations may be overstretched. Foreign investors were net sellers for a 13th consecutive session, while institutional and retail flows also turned negative. The volatility forced the Korea Exchange to activate a sell‑side sidecar and, for the seventh time this year, a circuit‑breaker that halted trading for about 20 minutes.

Despite the decline, the index recovered modestly later in the day, ending near 7,500 points, and a brief rebound was seen on Monday as the market tracked gains on Wall Street. Analysts highlighted that the broader Asian semiconductor sector, including peers in Japan and Taiwan, felt pressure, but firms such as TSMC and Foxconn remained relatively stable.