South Korea's KOSPI plunges over 5% amid Middle East tension and oil price shock

On July 24 the Korea Composite Stock Price Index (KOSPI) fell sharply, dropping to around 6,690 points – a decline of about 5.7 % – after reaching as low as 6,650. The tumble was triggered by heightened geopolitical risk in the Middle East, which pushed international oil prices higher and dampened risk appetite.

The rapid decline activated the market’s “sell‑sidecar” mechanism, a five‑minute program‑trading pause that kicks in when the KOSPI200 futures fall more than 5 % for at least one minute. Foreign investors and institutional funds were net sellers, offloading roughly 5.2 trillion won and 1.9 trillion won respectively, while retail investors bought about 5.2 trillion won. Major semiconductor giants Samsung Electronics and SK Hynix slid 7‑8 %, while other heavyweight chips also fell sharply. Some bio‑pharma stocks, such as Samsung Biologics, posted gains of around 10 %. The Korean won edged higher to about 1,466.6 per U.S. dollar.

In the same session, outstanding margin loans – a gauge of leveraged retail investing – dropped to 32.75 trillion won, the lowest level in more than three months, reflecting investors’ retreat from leveraged bets amid the volatile market correction.