The Korea Composite Stock Price Index (KOSPI) fell 3.6% at the open on August 3.

As of the time of writing, the KOSPI was down 4.62% to 6,290.52 points, with both Samsung Electronics and SK Hynix dropping more than 5%.

Affected by the broader global semiconductor sector adjustment, the market is concerned about overvalued AI-related stocks, rising leverage ratios, and the spread of partial forced liquidation risks. South Korean stocks had previously suffered a sharp collapse, with market sentiment plunging into a deep freeze.

From June 23 to July 30, the KOSPI lost nearly 40% of its value, with over 2,800 trillion won in market capitalisation wiped out—a sum exceeding South Korea's entire GDP for 2025. Some leveraged products on individual stocks fell more than 80% from their highs.

On social media platforms, terms such as "margin call," "forced liquidation," and "leveraged ETF blowout" became trending topics. On July 31, the KOSPI rebounded nearly 18% in a single day, with some 2x leveraged bull ETFs surging over 60%.

Although the KOSPI has now recovered above the 6,000-point level, it still remains a third lower than its level of more than 9,000 points just over a month ago.

From 2000, when South Korea established its circuit breaker mechanism, through to the end of 2025, the entire market had triggered only five circuit breakers in 25 years. However, since entering 2026, the frequency of triggering has risen sharply. As of the end of July, the market-wide circuit breaker has been triggered a total of nine times, with four of those occurring in the single month of July alone.

Sources: Market data, Interface News, public information