On Aug. 26, officials check the KOSPI and major stock indexes at Hana Infinity Seoul in Hana Bank’s main branch in Jung-gu, Seoul. The KOSPI plunged more than 8% during the session that day, triggering a circuit breaker. Reporter Oh Seung-hyun
South Korea’s stock market experienced record gains and crashes simultaneously this week (June 22-26), displaying its fiercest volatility in recent memory. The KOSPI, which had set an all-time high, recorded its largest-ever single-day decline just a day later. It appeared to rebound but could not withstand large-scale profit-taking at the end of the half-year. Expectations surrounding AI chips grew even stronger, yet structural challenges for the market resurfaced during the week, including the failure to be included in the MSCI developed market index and controversy over leveraged products.
First-Ever Two Circuit Breakers in a Single Week: Extreme Volatility
According to the Korea Exchange on Saturday, the KOSPI opened at 9,052.42 on June 22 and closed at 8,411.21 on June 26, falling 7.08% over the week. The KOSDAQ also fell from 966.59 to 851.37 over the same period, down 115.22 points (11.92%).
On June 22, the KOSPI recorded an all-time closing high of 9,114.55, but the mood reversed sharply within a day. On June 23, the index plunged 9.99%, marking the largest single-day decline on record, with a sell-side sidecar and a circuit breaker triggered in succession.
The KOSPI rebounded on June 24-25 as bargain hunting flowed in, but on June 26 it fell more than 5% again as end-of-half rebalancing and profit-taking concentrated. A circuit breaker was triggered that day as well, marking the first time in the history of Korea’s stock market that trading was halted twice in a single week. This was the first instance of two circuit breakers being triggered in the same week since the market’s launch.
Market participants analyzed that the possibility of Apple raising product prices due to surging memory prices, along with concerns over U.S. Big Tech companies slowing the pace of AI investment, dampened investor sentiment.
◆ Chips Remain the Lead Even Amid Turbulence: SK hynix (000660), Micron Double Tailwind
Even amid extreme volatility, mid- to long-term expectations for the semiconductor sector actually grew. On June 23, SK hynix overtook Samsung Electronics (005930) to become the No. 1 company by market capitalization on the KOSPI. It was the first time in about 25 years and seven months that Samsung Electronics had ceded its top market-cap position. Samsung Electronics regained the lead within two days, but the moment was seen as a symbolic display of expectations for the AI memory market.
On June 24, SK hynix announced a plan to issue American depositary receipts (ADRs) worth up to 45.45 trillion won, targeting a Nasdaq listing on July 10. As expectations grew that the company would attract global investors and receive a higher corporate valuation in the U.S. market, investor sentiment toward semiconductor stocks strengthened further. SK hynix said the raised funds would be invested in facilities such as the Yongin semiconductor cluster.
Micron added to the positive news. On June 25 (June 24 local time), Micron reported earnings that far exceeded market expectations. Revenue increased about 4.5-fold from a year earlier, and by disclosing a long-term supply contract backlog (RPO) worth 100 billion dollars, it raised expectations that AI memory demand would last longer than anticipated.
In response, securities firms successively raised their target prices for SK hynix and Samsung Electronics. For SK hynix’s average target price, Mirae Asset Securities newly presented 4.2 million won and Samsung Securities 3.5 million won. For Samsung Electronics, KB Securities and Mirae Asset Securities presented 550,000 won and Daishin Securities 560,000 won. Although the possibility of a correction remains given the sharp short-term rise in share prices, analysts say the broader trend of expanding AI investment and recovering memory market conditions remains unchanged.
◆ MSCI Bid Fails Again, Leverage Controversy: Challenges Remain
Issues related to market systems also continued. The much-anticipated inclusion in the Morgan Stanley Capital International (MSCI) developed market index fell through again this time. In its 2026 annual market classification announced on June 23, MSCI did not place Korea on the watchlist for the developed market index.
MSCI assessed that constraints such as access to the offshore foreign exchange market and limitations on won conversion still remained. While it acknowledged the Korean government’s efforts to improve the system, it determined that the fundamental inconvenience felt by foreign investors had not yet been resolved. The government said, “If we continue reforming the foreign exchange and capital markets according to our own needs, inclusion in the MSCI developed market index will follow naturally.”
Amid the volatile market, concerns over single-stock leveraged and inverse ETFs resurfaced. At a press conference on June 22, Financial Supervisory Service Governor Lee Chan-jin said, “I personally regret not blocking it even if I had to lie down to stop it,” adding, “The turnover rate is so excessive that the tail is wagging the dog.”
Market observers point out that short-term trading is amplifying volatility as single-stock leveraged products are added to ETFs heavily weighted toward Samsung Electronics and SK hynix. In fact, sidecars have been triggered a total of 29 times this year, already surpassing the annual record (26 times) during the 2008 global financial crisis. Circuit breakers have also been triggered five times this year, including twice this week alone.
Volatility indicators also surged. On June 24, the KOSPI200 Volatility Index (V-KOSPI) closed at 94.81, up 5.4 points from the previous trading day. It exceeded the 91.23 recorded on June 9, surpassing that level again in 11 trading days. During the session, it soared as high as 97.78, approaching the 100 mark.
