South Korea halts KOSPI trading following steep drop in tech equities

South Korea halted trading on its primary equities market on Thursday following a steep decline in technology shares that forced exchange operators to trigger automatic market curbs.

The Korea Composite Stock Price Index experienced an abrupt drop exceeding 8 percent relative to Wednesday's closing level, prompting the Korea Exchange to initiate a 20-minute suspension of trading for all KOSPI-listed equities beginning at 12:38 p.m. local time, according to Yonhap News Agency.

Market participants pointed to widespread liquidations in the semiconductor segment as the main driver behind the downturn. Investors pulled back from major chip producers amid mounting doubts regarding the longevity of the artificial intelligence boom, which had previously fueled significant rallies across global equity markets.

Sentiment was further dampened by economic indicators from abroad. Stronger-than-anticipated inflation figures out of the United States weighed heavily on the Seoul bourse, exacerbating market worries that elevated interest rates could persist for longer than previously anticipated.

Thursday's intervention marked the ninth time during the current year that the bourse operator has been forced to activate circuit breakers on the benchmark index. Such safety mechanisms are designed to temporarily pause transactions during periods of extraordinary market turbulence, allowing market participants time to digest rapid price swings and prevent panic selling.

Trading was scheduled to resume following the conclusion of the mandatory 20-minute cooling-off window. The sharp retreat reflects broader volatility in global technology investments as traders reassess valuations tied to artificial intelligence amid broader macroeconomic pressures and shifting monetary policy expectations.