Kospi hits circuit breaker; down 20% from record high; what led to the crash today 

South Korea’s Kospi came under intense selling pressure on Wednesday amid a crash in global markets. The stock index plunged 12% to close at 5,093.54 on Wednesday. It had fallen 7.2% in the previous session. Today’s stock movement on the South Korean bourse saw activation of circuit breaker for the first time since August 2024. The bourse activated circuit breaker, halting trading for 20 minutes, after the benchmark stock index fell 8%. Later, South Korea’s stock market added losses after triggering a circuit breaker.

With today’s crash, the index has fallen nearly 20% from its record high of 6,347.41 reached on February 27 this year. 

Shares such as Samsung Electronics (up 44% in February), SK Hynix (rose 27.8% in February) and Hyundai Motor Group (6%) took the index to a record high in the last trading session of February on the back of a prolonged AI-driven rally, which led to stretched valuations.

The Kospi index had gained 36% last year. 

But in the current session, the same set of stocks took a severe beating from bears. Samsung Electronics fell 11.74%, SK Hynix crashed 9.58% and Hyundai Motor Group shares plunged 15.80%, reflecting negative sentiment on the Korean indices. LG Electronics stock too closed 11.58% lower. 

Meanwhile, it’s obvious to cite factors such as high oil prices, and global market crash behind today’s debacle in Kospi. But the Korean market crash today seems to have another story. 

Shanaka Anslem Perera, an independent analyst says energy is the binding constraint on everything, including the AI future.

The AI angle comes into role as the analyst says, “Every NVIDIA Blackwell chip, every Google TPU, every hyperscaler expansion relies on memory manufactured overwhelmingly in one country.”

“The entire global memory supercycle, projected to exceed $440 billion in 2026, depends on fabs that cannot run without imported oil and LNG flowing through contested waters,”  says Perera. 

And he mentions on X that Samsung and SK Hynix together control 67% of global DRAM production and nearly 80% of high-bandwidth memory revenue.

DRAM (Dynamic Random Access Memory) is a volatile semiconductor memory used in computers and electronics to store data, with each bit held in a cell. 

The delay in imported oil could then delay the AI supercycle in that country. This led to the market crash today, he writes.