Market Meltdown and Sharp Rebound

South Korean stocks suffered their steepest one-day fall in recent memory on Tuesday, when the benchmark KOSPI plunged 9.99 percent to close at 8,203.84, according to Yonhap News Agency. The index, which had opened lower and hit an intra-day high of 9,175.35, fell 910.71 points before the Korea Exchange (KRX) activated a circuit breaker at around 2:33 p.m. after the index plummeted more than 8 percent from the previous session's close. It marked the fourth time this year and the tenth time on record that trading was halted for 20 minutes.

Yonhap attributed the sell-off to foreign investors dumping major semiconductor shares and other market heavyweights amid profit-taking, tracking overnight losses in U.S. technology stocks. The tech-heavy Nasdaq Composite fell 1.3 percent, while concerns over major technology companies weighed on sentiment. Shares of SpaceX tumbled more than 16 percent after reports that the company is selling bonds as part of a major fundraising effort to support its artificial intelligence initiatives.

While U.S. Vice President JD Vance said a "very good foundation" had been established for negotiations toward a final agreement with Iran, and mediators reported progress in the talks, the diplomatic developments did little to lift U.S. markets.

In Seoul, blue-chip technology shares led the decline. Samsung Electronics fell 4.95 percentvall, while SK hynix dropped 5.34 percent. Samsung Electro-Mechanics, an electronic components affiliate of Samsung Electronics, declined 2.06 percent. Automakers also suffered, with Hyundai Motor down 8.43 percent and its smaller affiliate Kia losing 2.4 percent.

The Korean won weakened to 1,539.1 won per U.S. dollar as of 3:30 p.m., down 2.1 won from the previous session.

The market rebounded sharply the following morning. After opening 1.86 percent higher, the KOSPI added 272.43 points, or 3.32 percent, to reach 8,476.27 as of 11:20 a.m. Yonhap reported that individual investors went bargain hunting following the previous session's massive sell-off, with blue-chip technology shares trading firmly in positive territory.

Semiconductor heavyweights led the recovery: Samsung Electronics gained 7.26 percent and SK hynix rose 2.43 percent. Samsung Electro-Mechanics advanced 2.06 percent. Automobile shares also recovered, with Hyundai Motor up 0.59 percent and Kia climbing 2.4 percent.

The won strengthened to 1,536.7 per dollar, up 2.4 won from the previous session.

Key Claims

  • KOSPI fell 9.99 percent on Tuesday, closing at 8,203.84, after an intra-day high of 9,175.45.
  • The KRX activated a circuit breaker at 2:33 p.m. after the index dropped more than 8 percent, marking the fourth such halt this year.
  • The sell-off was driven by foreign investors dumping semiconductor and other heavyweight shares, tracking an overnight decline in U.S. tech stocks.
  • The Nasdaq Composite fell 1.3 percent overnight; SpaceX shares dropped more than 16 percent on reports of a bond sale for AI initiatives.
  • On Wednesday morning, the KOSPI rebounded 3.32 percent to 8,476.27 by 11:20 a.m.
  • Samsung Electronics gained 7.26 percent and SK hynix rose 2.43 percent in the rebound.
  • The won traded at 1,536.7 per dollar at 11:20 a.m. Wednesday, up 2.4 won from the previous session.