Seoul — July 29, 2026. Published after the market close; prices are official closing values.
The 30-second version
- The KOSPI closed at 5,663.24, down 5.98%, and the KOSDAQ at 662.68, down 6.12%. Level 1 circuit breakers halted both markets for a second consecutive session — the first back-to-back, both-market trigger in Korean market history, according to local reports.
- The proximate cause: SK hynix fell 9.61% after a record second quarter that came with underwhelming guidance and no new shareholder-return plan, while worries about China’s advancing chip capabilities deepened the sector rout.
- Forced selling from single-stock leveraged ETFs and ETNs tied to Samsung Electronics and SK hynix — a roughly KRW 6.8 trillion (about $4.7 billion) pool of products — amplified the decline.
- On the KOSPI main board today, individuals and foreign investors both sold while institutions bought about KRW 3.15 trillion (roughly $2.2 billion), not enough to hold the line.
- Brokerages note the KOSPI now trades near 5.1 times 12-month forward earnings — cheap by most standards, but nobody caught the falling knife today.
Two days, two circuit breakers
A circuit breaker is the exchange’s emergency brake: when the index falls 8% from the prior close, all trading halts for 20 minutes to let panicked order flow cool off. Korea has three escalating levels; only Level 1 fired today. What made this session historic is the repetition — both the KOSPI and KOSDAQ tripped their breakers on Tuesday and again on Wednesday, something that had never happened on consecutive days across both markets.
The arithmetic tells you how violent the intraday move was. The KOSPI closed down 5.98%, but the breaker requires an 8% drop to trigger — meaning the index was at least 8% underwater at some point before clawing part of it back. Add Tuesday’s 10.84% collapse, and the KOSPI now sits about 20% below its July 23 close of 7,096.89. That is a bear-market-sized drawdown compressed into four trading sessions.
Why it happened: a chip letdown met leveraged money
The spark was SK hynix. The memory-chip maker reported its best-ever second quarter, yet the stock fell 9.61% — because markets trade on the future, not the past. Guidance came in below expectations and management offered no fresh shareholder-return measures, and in a market priced for AI-driven perfection, that was enough. Layer on renewed anxiety about China’s semiconductor self-sufficiency push, plus an ugly overnight lead — the Philadelphia Semiconductor Index dropped 4.49% in the previous US session — and the whole Korean chip complex was sold. Samsung Electronics lost 5.23%; equipment maker Hanmi Semiconductor fell 6.63%.
Then the mechanical selling kicked in. Korea has a large market in leveraged ETFs and ETNs built on single stocks — products that magnify daily moves in names like Samsung and SK hynix. When the underlying stocks crater, losses in those products trigger collateral shortfalls and forced liquidations, which dump more shares into an already falling market, which triggers more forced selling. It is the same doom-loop mechanics as a margin call, just industrialized. Local reports put the affected product pool at roughly KRW 6.8 trillion.
The damage was market-wide: all eight KODEX sector-ETF proxies we track fell, from autos and banks (each -1.91%) to semiconductors (-8.30%) and construction (-8.62%). (These are ETF proxies and can deviate slightly from official sector indices.) The rare green: Celltrion gained 1.47%, and Krafton closed flat after filing both a share-buyback decision and preliminary earnings with the regulator (DART filing) — a reminder that concrete shareholder returns were exactly what SK hynix investors felt they did not get.
Who sold, who bought
Today’s KOSPI main-board flows, per local reports: individuals net sold KRW 1.98 trillion and foreigners KRW 1.21 trillion, while institutions net bought KRW 3.15 trillion in an attempted defense. The retail selling is notable — Korean individuals are usually dip-buyers, and in the previous session (July 28, KOSPI and KOSDAQ combined) they had bought KRW 4.32 trillion while foreigners dumped KRW 4.50 trillion (about $3.1 billion). Foreign investors have now sold a cumulative KRW 5.89 trillion (roughly $4.1 billion) over the five sessions through July 28.
The ammunition picture, as of July 27: investor deposits — sidelined cash in brokerage accounts — stood at KRW 109.2 trillion (about $75 billion), with margin loans at KRW 32.7 trillion. One oddity worth flagging: the won actually strengthened, with USD/KRW down 1.21% to 1,446.68 on the global 24-hour feed (which can differ slightly from the official Seoul close). A currency firming during an equity crash suggests this was a positioning unwind inside the stock market, not a broad flight from Korean assets.
Key closing numbers
| Item | Close (2026-07-29) | Change |
|---|---|---|
| KOSPI | 5,663.24 | -5.98% |
| KOSDAQ | 662.68 | -6.12% |
| Samsung Electronics | KRW 208,500 | -5.23% |
| SK hynix | KRW 1,401,000 | -9.61% |
| Celltrion | KRW 180,000 | +1.47% |
| USD/KRW (24h feed) | 1,446.68 | -1.21% |
| WTI crude | $82.30 | +3.84% |
| SOX (US, July 28) | 11,035.68 | -4.49% |
What to watch next
- Korea customs 10-day trade data around August 1 — the first hard read on whether export fundamentals justify the fear.
- Whether foreign selling breaks its streak after KRW 5.89 trillion of net sales over five sessions through July 28.
- Updated margin-loan and deposit figures — a fast drop in the KRW 32.7 trillion loan balance would signal the forced deleveraging is burning itself out.
- Any regulatory response on single-stock leveraged ETFs and ETNs after two days of breaker-triggering cascades.
- Whether a 5.1x forward P/E starts attracting buyers once earnings visibility improves.
FAQ
Why did the Korean stock market crash on July 29, 2026?
Two forces compounded: disappointment over SK hynix’s guidance and lack of shareholder returns despite record earnings, plus forced liquidations from roughly KRW 6.8 trillion in single-stock leveraged ETFs and ETNs, which turned a chip-sector selloff into a market-wide cascade. Worries about China’s chip advances and a 4.49% overnight drop in the US semiconductor index set the stage.
What is a circuit breaker in the Korean stock market?
A mandatory 20-minute trading halt across the whole market, triggered when the index falls 8% from the previous close (Level 1, with deeper levels at larger drops). Both the KOSPI and KOSDAQ triggered Level 1 breakers on July 28 and again on July 29 — the first consecutive-day, both-market occurrence on record.
Are foreign investors selling Korean stocks?
Yes. Foreigners net sold about KRW 4.50 trillion across KOSPI and KOSDAQ on July 28 and roughly KRW 1.21 trillion on the KOSPI main board on July 29, bringing five-session net sales through July 28 to KRW 5.89 trillion (about $4.1 billion). Notably, the won still firmed, suggesting equity de-risking rather than capital flight.
Is the KOSPI cheap after the drop?
By the numbers, yes — brokerages estimate a 12-month forward P/E near 5.1x after a roughly 20% fall from the July 23 close. But analysts caution that a durable rebound needs confirmed earnings and reduced external uncertainty, and cheapness alone did not stop today’s selling.
Disclaimer: This is an information and analysis publication, not investment advice. See our Methodology for data sources, standards, and our corrections policy.