South Korea’s stock market plunge erases hundreds of thousands of margin accounts

South Korea’s main equity index, the KOSPI, fell about 44% over a 40‑day span, erasing roughly $2 trillion of market value. The collapse was driven by a rapid unwind of leveraged bets on the two chip giants Samsung Electronics and SK Hynix, which together account for nearly half of the index.

More than 360,000 margin accounts – two‑thirds held by investors under 35 – were wiped out as forced liquidations cascaded through the market. The sharp fall triggered circuit‑breaker halts on consecutive trading days.

In response, the South Korean government convened an emergency meeting and announced stricter limits on leveraged products and margin‑trading funds tied to the chip stocks, aiming to stabilise the market and protect retail investors.