[Edaily Reporter Kim Kyung-eun] On the 8th, the Korean stock market faced a "Black Monday." Both the KOSPI and KOSDAQ triggered circuit breakers—temporary trading halts—for 20 minutes, plunging by 8% and 9%, respectively. Market capitalization of around 600 trillion won vanished in a single day. Some observers point to this as a backlash from the overheating caused by the semiconductor-led rally. While stock markets in major Asian countries fell across the board, South Korea’s decline was particularly pronounced.

According to MP Doctor, the KOSPI closed at 7,484.41, plummeting 676.18 points (8.29%) from the previous trading day, marking the second-largest single-day point drop and the ninth-largest percentage drop in history. The KOSDAQ also plunged 91.05 points (9.08%) to 911.39, ranking 14th in terms of the largest single-day percentage drop.
Approximately 553 trillion won in market capitalization evaporated from the KOSPI, and about 50 trillion won from the KOSDAQ. While major Asian markets, including Japan’s Nikkei 225 (-3.85%) and Taiwan’s Weighted Index (-3.48%) all fell, but the domestic stock market saw both markets plunge simultaneously. The KOSPI triggered its ninth-ever circuit breaker at 9:03 a.m., and the KOSDAQ, following a sell-side circuit breaker in the morning, triggered its 12th-ever circuit breaker at 2:36 p.m. This marks the first time both markets have triggered circuit breakers simultaneously in about three months, since March 4.
The trigger was the surprise in the U.S. May jobs report. Nonfarm payrolls increased by 172,000, more than doubling market expectations (85,000), causing concerns about a Fed rate hike to surge. The Philadelphia Semiconductor Index (SOX) plummeted 10.3%, and stocks like Micron (-13.3%) and AMD (-10.9%) faced a sell-off. Over the weekend, Iran’s missile attack on northern Israel reignited Middle East risks.
The reason South Korea was hit particularly hard is attributed to profit-taking. Lee Young-won, an analyst at Heung Kuk Securities, noted, “The sharp rise in prices is causing high volatility,” adding, “The problem lies with semiconductor stock prices themselves, rather than concerns over rising interest rates or individual companies’ underperformance.” The Philadelphia Semiconductor Index surged 91.5% from the start of the year to its peak on the 3rd, while the KRX Semiconductor Index jumped 176% to its peak on the 4th.
On that day, foreign investors net sold 354.3 billion won on the KOSPI, extending their selling streak to 21 consecutive trading days. Institutions also sold off 1.6267 trillion won. Retail investors alone absorbed 1.7631 trillion won.
The two semiconductor giants—#SamsungElectronics and #SKHynix—which account for more than half of the market capitalization, closed at 295,500 won and 1,911,000 won, respectively, down 10.18% and 7.68%.
However, market experts drew a line at declaring a full-fledged bear market. Analyst Lee stated, “Samsung Electronics and SK Hynix have recorded over $30 billion in semiconductor exports for three consecutive months from March to May, so there is a high probability that strong growth will continue in the second half of the year,” adding, “This decline is not a broader downtrend but a phase of speed adjustment following a sharp rally.”
On the KOSDAQ, the sharp decline is attributed to an oversold situation caused by a supply-demand imbalance amid heavy concentration on large-cap semiconductor stocks. Kang Jin-hyuk, a senior researcher at Shinhan Investment Securities, analyzed, “While foreign investors have maintained net selling on the KOSPI for 21 consecutive trading days, they have actually been net buyers on the KOSDAQ for three days this month.” He added, “The KOSDAQ’s decline is more characterized by overselling due to a supply-demand imbalance than by damage to fundamentals.”