Key Takeaways
- Kospi and Kosdaq triggered circuit breakers on Wednesday, Korea’s first-ever back-to-back halt.
- SK Hynix fell sharply despite reporting a 557% jump in quarterly profit that still missed forecasts.
- Bitcoin rose about 1% toward $64,000, decoupling from Korea’s selloff for a second week straight.
A Record Back-to-Back Circuit Breaker
The Korea Exchange halted trading on both the Kospi and the smaller Kosdaq index for 20 minutes, a mechanism that automatically freezes an entire market for a fixed window once an index falls a set percentage in a single session. Kosdaq triggered its halt first, falling 56.85 points, or 8.05%, to 649.00 at 12:19 p.m. local time. The Kospi followed 13 minutes later, sliding 491.33 points, or 8.15%, from Tuesday’s 6,023.66 close to hit 5,532.33 at 12:32 p.m.
It was the first time in Korean market history the benchmark had triggered circuit breakers on consecutive trading days. The rout followed Tuesday’s eighth circuit breaker of the year, when the Kospi plunged 8.02% intraday and closed down 10.8% after news that a Chinese company had begun mass production of a homegrown deep ultraviolet (DUV) chipmaking tool, threatening Samsung Electronics and SK Hynix’s grip on the memory-chip export market.
Local reporting attributed Wednesday’s extension of the selloff to continued weakness in large semiconductor stocks, heavy foreign selling, and lingering concern over supply-and-demand pressure from single-stock leveraged exchange-traded funds (ETFs) that had ballooned in size earlier this year.
A Profit Beat That Still Wasn’t Enough
The selloff deepened even as SK Hynix reported blowout earnings. The chipmaker’s shares fell sharply Wednesday despite posting a 557% jump in quarterly profit, a result that still missed the elevated expectations Wall Street and Seoul investors had built into the stock after months of AI-driven memory-chip demand.
The mismatch once again brought to light just how far semiconductor valuations across Asia had run ahead of fundamentals, leaving little room for anything short of a blowout to satisfy the market.
Bitcoin Breaks From the Pattern
Bitcoin had tracked Korea’s selloff closely on Tuesday, sliding about 2.7% to roughly $63,000 as the Kospi’s initial crash coincided with rising Federal Reserve rate-hike odds and a stalling CLARITY Act to help drive a wave of crypto liquidations. Subsequently, the last 24 hours have seen the asset climb above $64,400 even as Korea’s second straight circuit breaker played out.
In the meantime, Senate Majority Leader John Thune signaled the CLARITY Act would not clear the chamber before its August recess, before recovering alongside the broader crypto market.
Wednesday marked the second time in seven days that crypto held its ground through a sharp unwind in AI-linked equities, a pattern that suggests bitcoin’s tight correlation with semiconductor and AI stocks may be loosening. Analysts have generally described the relationship between Kospi swings and bitcoin moves as correlated through a shared investor base rather than causally linked, a framing that Wednesday’s divergence complicates without fully resolving.
Samsung Electronics and SK Hynix remain the two most heavily weighted stocks on the index, meaning one more leg down in chip shares could easily trigger another circuit breaker before Korean markets get a chance to stabilize.
