South Korea's Kospi Index Suffers Historic 12% Crash, Entering Bear Market Territory

Key Facts

1The Kospi index suffered its biggest one-day drop in history, plunging over 12%, surpassing the Covid and Lehman Brothers crashes.

2Trading in both Kospi and Kosdaq shares was suspended for 20 minutes after circuit breakers were triggered.

3The index briefly entered a bear market after dropping more than 20% from its all-time high reached just two days prior.

South Korea's Kospi index experienced its most significant single-day decline in history, plunging more than 12% in a session marked by extreme volatility. The massive sell-off triggered automatic circuit breakers on both the Kospi and Kosdaq exchanges, leading to a 20-minute suspension of trading. This historic rout officially pushed the index into bear market territory as it fell 20% from its recent all-time high reached just two days prior. The collapse was primarily driven by a sharp reversal in the semiconductor sector, heavily impacting major players like Samsung Electronics and SK Hynix. Analysts attribute the crash to a combination of massive leveraged liquidations and panic-driven selling across Korea-linked ETFs. This unprecedented two-day decline has effectively wiped out nearly a year of gains fueled by the global artificial intelligence and memory chip rally.