KOSPI plunges 8% amid profit booking chip stocks; Samsung and SK Hynix fall over 10%

The Korean and Japanese benchmark indices witnessed a sharp selloff in a few minutes on Tuesday IST 12:00 pm. The South Korean benchmark KOSPI index hit 8% circuit breaker levels on Tuesday after a heavy selloff in its chip-making stocks. Similarly, the Japanese benchmark indices plunged 3%, taking cues from the selloff in Korean markets.

The Korean KOSPI index made a fresh record high of 9,389 on Friday amid renewed optimism around its chip stocks. However, concerns prevailed as leveraged positions in the chip stocks like Samsung and SK Hynix increased exponentially.

The shares of Samsung and SK Hynix led the fall by plunging 10.8%, and SK Hynix's share price fell the most, 11.4% amongst the two. The two chip-making giants constitute over half of the KOSPI index’s market capitalisation, translating into a 8% fall in the KOSPI index.

The Korean markets have rallied over 120% in 2026 on a YTD basis in a run-up to rally in chip-making stocks. Shares of SK Hynix jumped over 340% in 2026, leaving behind Samsung Electronics by market capitalisation. Samsung Electronics also participated in the rally by soaring over 200% in the same period.

The profit booking sentiment was also visible in Japanese tech stocks as they plunged up to 10% on Tuesday afternoon. Japanese benchmark Nikkei plunged 3% on Tuesday after the tech giants like Softbank Group, chip maker Kioxia, fell 10% and 13% respectively.

Taking cues from the selloff in Asian markets, the NIFTY50 erased morning gains and plunged over 170 points and traded below the 24,000 mark. Similarly, the SENSEX also fell nearly 500 points to trade near 76,600 levels.

Similarly, the US stock market futures on NASDAQ and the S&P500 also fell up to 2% on Tuesday afternoon after selloff in tech stocks spooked the investor sentiment across the globe.