Korea Exchange halts KOSPI after 8% slide as chip stocks deepen selloff

South Korea’s stock market suffered another steep selloff on July 29, with both the KOSPI and KOSDAQ dropping more than 8% intraday and triggering Level 1 circuit breakers for a second straight session. The back-to-back simultaneous halts on both markets were described as a first in the country’s history, underscoring acute investor fear and the failure of stabilization measures to calm trading. The Korea Exchange said the KOSPI halt was activated at 12:32:32 p.m. local time after the benchmark fell 492.10 points, or 8.17%, to 5,531.56. The KOSDAQ triggered earlier at 12:19:12 p.m. after dropping 56.85 points, or 8.05%, to 649.00. A Level 1 circuit breaker is used when an index falls more than 8% from the previous close and stays there for one minute, leading to a 20-minute trading suspension followed by a 10-minute single-price call auction. Selling intensified even after trading resumed. By 1:30 p.m., the KOSPI was down 727.66 points, or 12.08%, at 5,296, while the KOSDAQ had fallen 73.39 points, or 10.40%, to 632.46. The renewed collapse raised concern over a possible Level 2 circuit breaker, which has never been triggered in South Korea. That mechanism would require a drop of more than 15% from the previous close and an additional 1% fall below the Level 1 trigger level for one minute. Large-cap semiconductor names were at the center of the rout, with Samsung Electronics down more than 8% and SK Hynix off over 12%. On the KOSPI, institutional investors were the biggest sellers, with net sales of 1.97 trillion won, while retail and foreign investors also sold. On the KOSDAQ, foreign investors were net buyers, but retail selling outweighed those purchases. Market breadth was overwhelmingly negative across both exchanges, reflecting an indiscriminate selloff.