South Korean Stock Market Collapses in Record Two-Day Rout

The South Korean benchmark KOSPI index suffered a historic collapse on July 28 and 29, 2026, marking one of the worst two-day declines in its history. The index fell approximately 11% on Tuesday and between 6% and 12.6% on Wednesday, erasing nearly 40% of its value from a June peak and wiping up to $2.18 trillion from the market. The volatility triggered multiple sell-side sidecars and market-wide circuit breakers on both days.

Samsung Electronics and SK Hynix led the crash, with both companies seeing double-digit losses. The rout was driven by investor skepticism regarding the sustainability of AI infrastructure spending and high valuations. Fears were intensified by the record $8.6 billion IPO of China's ChangXin Memory Technologies (CXMT) and reports that Shanghai Yuliangsheng Technology began mass-producing domestic immersion DUV lithography machines, effectively circumventing Western export controls and threatening the dominance of ASML Holding.

SK Hynix faced additional pressure after reporting a quarterly operating profit of 60.54 trillion won; despite a six-fold year-over-year increase, the figure missed analyst expectations and provided few details on shareholder returns. The turmoil extended across Asia, impacting the Nikkei 225 and TSMC. In response to the crisis, the Financial Services Commission is considering tighter leverage controls, and Finance Minister Koo Yun-cheol apologized for the introduction of single-stock leveraged ETFs, which exacerbated the decline through forced retail liquidations.