KOSPI plunges 8% amid the rout in global tech stocks; hit circuit breaker levels third time in one year

The Korean stock markets are buzzing once again after they triggered the circuit breaker levels for the third time in one year as the benchmark Kospi index plunged 8% on Monday morning. The Korean markets have more than doubled in 2026 alone as an AI-led rally in memory chip-making stocks in Korea boosted the sentiment. However, a sharp plunge in tech stocks in the US jolted the investor sentiment in Korea on Monday morning, prompting massive profit booking.

South Korea’s benchmark KOSPI index opened 1.6% lower and extended the fall to 8% in the initial trading hours. Additionally, tensions flared up between Iran and Israel after Iran fired missiles towards Israel, alleging a fragile ceasefire between Israel and Lebanon. The escalations drove the crude oil prices up 4% on Monday morning. Elevated crude oil prices and profit booking in tech stocks pulled the Korean benchmark indices lower on Monday morning.

Shares of Samsung and SK Hynix, the poster boys of Korea’s current AI rally, plunged over 10% on Monday morning, as investors preferred to trim their profits in the memory chip-making companies amid the rout in tech stocks in the US. Samsung Electronics shares have rallied over 200% YTD to hit fresh record high levels of KRW 3,70,000. Meanwhile, SK Hynix shares soared over 261% at record high levels in 2026 alone. The two chip giants, together, accounted fo 54% of the total Korean benchmark index, driving all the volatility in the index.

Concerns weigh on the current rally in Korean markets as retail investors in Korea, often described as ‘Ants’, are driving the rally, while foreign investors turn net sellers in the Korean markets. The Korean retail investors are driving the frenzy with overleverage, as data shows, the leveraged position increasingly contributed to the current market rally.