KOSPI Plunges Over 12% in Worst Single-Day Drop Since 9/11

South Korean equities suffered a "Black Wednesday" as the KOSPI plummeted more than 12%, marking the largest single-day decline in the index's history, surpassing the 12.02% drop following the September 11, 2001 terrorist attacks.

As of 12:33 p.m. on April 4, the KOSPI stood at 5,088.34, down 12.15% from the previous session, breaching the 5,100 level. The KOSDAQ fell 13.26% to 986.81, breaking below the 1,000 mark.

Circuit breakers were triggered on both markets after indices remained down more than 8% for over one minute. The KOSDAQ halted at 11:16 a.m. and the KOSPI at 11:19 a.m., suspending trading for 20 minutes. However, selling accelerated after trading resumed.

Panic selling erupted immediately at market open. The KOSPI opened down 3.44% at 5,592.59 while the KOSDAQ started 2.25% lower at 1,112.08, with losses quickly widening to 6%. Sidecars were activated on both markets shortly after the regular session began as futures markets collapsed. This marks the first KOSPI circuit breaker since August 5, 2024.

Only 20 stocks on the KOSPI traded higher, with 908 declining. Major stocks posted steep losses: Samsung Electronics (-11.38%), SK Hynix (-9.27%), Hyundai Motor (-15.97%), LG Energy Solution (-11.45%), Samsung Biologics (-9.64%), SK Square (-14.37%), Hanwha Aerospace (-11.87%), Kia (-14.37%), and HD Hyundai Heavy Industries (-13.39%). S-Oil was the sole gainer among the top 50 stocks by market capitalization, rising 15.22%.

Foreign investors drove the selloff, dumping 1.17 trillion won ($817 million) worth of shares on the main bourse before the circuit breaker. Retail and institutional investors purchased 638.8 billion won and 461.3 billion won respectively, but failed to stem the decline. On the KOSDAQ, retail investors sold 477.2 billion won while foreigners and institutions bought 145.4 billion won and 335.3 billion won respectively.

Analysts characterized the plunge as a short-term correction rather than fundamental deterioration. Lee Kyung-min, researcher at Daishin Securities, said: "Due to intensified short-term overheating, accumulated fatigue, and market cap weighting differences, the KOSPI is expected to enter a phase of cooling and digestion even if rotation toward domestic stocks continues." He added that "policy and earnings momentum will strengthen again after mid-March, leading to a more solid market," noting that "volatility in early March presents an opportunity to increase positions in leading stocks."

Bullish research emerged for semiconductor leaders despite the rout. Park Yu-ak, researcher at Kiwoom Securities, said: "The sharp memory price increases we've discussed since last fall are nearing completion, and we expect entry into a cycle of expanded capital expenditure and increased shipments based on elevated profitability." Park raised price targets for Samsung Electronics to 260,000 won and SK Hynix to 1.3 million won.