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South Korea’s benchmark KOSPI plunged more than 8 per cent on Monday, triggering a circuit breaker and temporary trading halt as a global technology selloff, rising US rate fears and geopolitical tensions rattled investors
South Korea’s stock market was forced to halt trading on Monday after the benchmark Korea Composite Stock Price Index (KOSPI) plunged more than 8 per cent in early trade, as a global technology-led selloff rippled across Asian markets and triggered panic selling in semiconductor shares.
The Korea Exchange activated a circuit breaker shortly after the market opened, suspending trading in KOSPI-listed stocks for 20 minutes after the benchmark index breached the exchange’s threshold for extreme volatility.
The sharp decline came as investors reacted to steep losses on Wall Street at the end of last week, where technology stocks suffered their worst rout in months amid renewed concerns that the US Federal Reserve could keep interest rates higher for longer.
Tech stocks lead the slide
The KOSPI’s decline was driven largely by heavy selling in South Korea’s technology and semiconductor sector, a key pillar of the country’s export-driven economy.
Market sentiment deteriorated after the Nasdaq fell 4.2 per cent on Friday, with semiconductor stocks posting their biggest one-day percentage decline since March 2020. Investors rushed to trim exposure to high-growth technology companies after stronger-than-expected US jobs data raised fears that inflationary pressures could persist, potentially prompting a more hawkish stance from the Federal Reserve.
The selloff brought an abrupt halt to a nine-week rally in US equities that had been fuelled by optimism surrounding artificial intelligence and expectations of lower interest rates.
Asian markets under pressure
Asian markets entered Monday’s session bracing for broad-based losses after Wall Street’s sharp reversal. Futures markets had already signalled steep declines for both Japanese and South Korean equities before trading began.
Analysts said concerns over elevated valuations in technology stocks, combined with rising bond yields and uncertainty over future monetary policy, were weighing heavily on investor sentiment.
US jobs data sparks rate fears
The trigger for the latest market turbulence was a stronger-than-expected US employment report for May, which prompted traders to reassess the likelihood of Federal Reserve interest rate cuts this year.
Following the jobs report, US Treasury yields surged, with two-year yields climbing more than 11 basis points on Friday as investors priced in the possibility of tighter monetary policy.
Higher interest rates tend to weigh disproportionately on technology stocks because they reduce the present value of future earnings, making growth-oriented companies less attractive to investors.
Geopolitical tensions add to uncertainty
Market jitters were compounded by renewed geopolitical tensions in West Asia. Oil prices rose sharply after Israel launched strikes on Beirut, prompting retaliatory missile attacks by Iran against Israeli targets.
Brent crude futures climbed more than 2.5 per cent to around $95 a barrel in early Asian trading, adding another layer of uncertainty for investors already grappling with concerns over inflation and interest rates.
Meanwhile, OPEC+ agreed on Sunday to raise oil output targets for a fourth consecutive month, a move closely watched by energy markets.
First Published:
June 08, 2026, 06:01 IST
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