South Korea's KOSPI plunges over 5% amid AI‑chip worries and circuit‑breaker halt

The Korea Composite Stock Price Index (KOSPI) fell more than 5 % on July 8‑9, 2026, triggering the market’s automatic circuit‑breaker after a steep intraday decline of up to 8 %. The sell‑off was led by semiconductor giants Samsung Electronics and SK Hynix, whose shares dropped between 6 % and 7 %, reflecting growing scepticism about the sustainability of AI‑driven capital spending. Foreign investors were net sellers, while domestic institutions bought, but overall sentiment turned negative as concerns over AI‑related over‑investment, rising oil prices from renewed U.S.–Iran tensions, and profit‑taking on memory‑chip rallies weighed on the market. The KOSDAQ also slipped about 4 % amid similar tech‑stock pressure. In response, South Korean regulators began reviewing possible curbs on single‑stock leveraged ETFs linked to Samsung and SK Hynix, citing their role in amplifying volatility and market concentration. Authorities warned they will monitor market stability closely, and the Financial Services Commission is considering tighter oversight. The combined effect of AI‑investment doubts, semiconductor‑sector concentration, and geopolitical risk has pushed the KOSPI into a bearish phase after a record‑high run earlier in the month.