South Korean stocks tumble a second day, sparking trading suspension

SEOUL - South Korea’s stock selloff deepened as chip-makers extended losses following disappointment about SK Hynix’s earnings and as retail investors cut holdings. 

The benchmark Kospi Index slid as much as 8.2 per cent, triggering a circuit breaker for a second straight day, and taking its two-day decline to more than 18 per cent.

The gauge is on course for a record monthly loss, having slumped more than 30 per cent in July, after a world-beating rally earlier in 2026 that relied almost entirely on two chipmakers: Samsung Electronics and SK Hynix.

SK Hynix tumbled as much as 13 per cent on July 29 after its earnings call with analysts ended with scant details on shareholder returns and its long-term contracts with clients. The chipmaker’s two-day drop amounted to about a quarter of its value. The company also said it will boost its capital spending to at least US$31 billion (S$40 billion) after reporting a six-fold surge in quarterly profit.

The Kosdaq Index of smaller and medium sized companies slid more than 8 per cent, triggering a circuit breaker earlier, that involves a trading halt for 20 minutes.

“SK Hynix is lifting capex to the high 40 trillion won range, while staying silent on shareholder returns and the pricing inside its long-term contracts, and that’s left investors feeling uneasy,” said Josh Gilbert, lead analyst for Asia Pacific and the Middle East at Etoro.

“Given the weight of SK Hynix and Samsung on the Kospi, there’s nowhere to hide when they fall together.”

Retail investors, who have helped fuel the rally in Korean shares in 2026 through stock margin loans and leveraged exchange-traded funds, were net sellers on July 29. They cut their holdings by about 1.7 trillion won (S$1.5 billion). 

The Kospi fell below the 6,000 mark to the lowest level since early April. Investors are now awaiting earnings results from Samsung Electronics on July 30 and other US big technology companies this week. BLOOMBERG