KOSPI plunges nearly 6% at market open, triggering sell-off circuit breaker

South Korea's KOSPI index experienced a sharp decline in early trading Friday, shedding nearly 6% and prompting the activation of a sell-off circuit breaker for the tenth time this year. The benchmark index fell below the 8200 mark for the first time in five trading days, highlighting significant market volatility.

The downturn was heavily influenced by major technology stocks. Samsung Electronics saw its shares drop by over 6%, while SK Hynix experienced an even steeper decline of more than 8%. This broad sell-off in key companies put considerable downward pressure on the overall market.

Analysts pointed to several factors contributing to the market's weakness. The poor performance of U.S. semiconductor stocks overseas and the pressure from the Korean won's exchange rate surpassing the 1530 level against the U.S. dollar were cited as key concerns. Han Ji-young, a researcher at Kiwoom Securities, suggested that while the market started lower due to these factors, a rotation from semiconductor to non-semiconductor sectors might help recover some of the intraday losses.

Meanwhile, the KOSDAQ index also suffered, trading down 3.81% at 1009.72 points around the same time. The combined pressure on both major indices underscores a challenging day for South Korean investors.

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The domestic stock market is expected to start lower today due to weak U.S. semiconductor stocks and the burden of the exchange rate exceeding 1530 won, but it is expected to recover its intraday losses as sector rotation from semiconductors to non-semiconductors unfolds.