South Korean Stocks and Won Plummet Amid Semiconductor Rout

South Korean equity and currency markets experienced a severe downturn between June 4 and June 5, 2026. The benchmark KOSPI fell over 2 percent on Thursday, followed by a massive plunge on Friday, where the index dropped as much as 6.88 percent and eventually closed down 5.54 percent at 8,160.59. This volatility triggered the year's 10th sidecar market safeguard, briefly suspending program trading.

Koo Yun-cheol, the South Korean Finance Minister, coordinated with the Bank of Korea and financial regulators on Thursday to monitor the foreign exchange market. Despite four rounds of verbal intervention by authorities, the Korean won weakened to 1,539.1 per dollar, nearing its lowest level since March 2009. The instability was fueled by foreign investors withdrawing a cumulative 70 trillion won over 20 consecutive sessions.

The crash was largely driven by a global rout in semiconductor shares after Broadcom Inc reported disappointing AI revenue outlooks. This triggered steep losses for Samsung Electronics and SK hynix. Additional pressures included uncertainty surrounding U.S.-Iran ceasefire negotiations and the upcoming June 12 IPO of Space Exploration Technologies Corp., which appeared to divert global capital away from the Korean market.