Viewpoint: South Korea's stock market circuit breaker mechanism has failed, making it difficult to effectively halt sell-offs.
2026.07.29 11:33:29
Today, the KOSDAQ index plunged over 8% intraday, triggering a Level 1 circuit breaker (activated when the index drops more than 8% from the previous day’s close and stays at that level for one minute). The circuit breaker mechanism has failed to effectively halt sell-offs. Earlier on July 28, both the KOSPI and KOSDAQ triggered Level 1 circuit breakers on the same day, yet the KOSPI still plummeted 10.84% overall, while the KOSDAQ fell 7.72%. The core logic behind this round of sell-offs is the valuation re-rating of AI semiconductors paired with structural flaws in South Korea’s market. Samsung Electronics and SK Hynix together account for over 40% of the KOSPI’s total market capitalization, meaning fluctuations in these two stocks can dictate the broader market’s direction. Samsung Electronics is currently down 5.45%, and SK Hynix is down 9.81%.
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