South Korean Stocks Plunge, Triggering Circuit Breakers for Second Consecutive Day

South Korea's stock market experienced a dramatic downturn on July 29th, with the KOSPI index closing down 5.99% at 5663.08 points. This followed a significant drop the previous day, and for the second consecutive trading session, both the KOSPI and KOSDAQ markets triggered circuit breakers, halting trading temporarily. This marks an unprecedented event since the implementation of the circuit breaker system.

During intraday trading, the KOSPI plummeted by over 12% to 5262.77, briefly dipping below the 5300 level. Major technology stocks were hit hard, with SK Hynix falling over 18% at one point and Samsung Electronics dropping 13%. SK Hynix and Samsung Electronics ultimately closed down 9.61% and 5.23% respectively.

The consecutive trading halts are attributed to a combination of factors. Overnight, the New York stock market saw declines in semiconductor stocks due to concerns about the sustainability of investment in the sector, controversies surrounding Nvidia's 'circular finance' trading, and the growing influence of China's semiconductor industry. The Philadelphia Semiconductor Index, a key benchmark, fell 4.5% over four consecutive days.

Furthermore, the recent IPO of China's Changxin Memory Technologies (CXMT) has intensified fears of China rapidly catching up to South Korea's memory chip industry. CXMT's successful listing, which surpassed Intel's market capitalization on its debut and raised significant capital, coupled with reports of China's progress in mass-producing deep ultraviolet (DUV) lithography equipment, has fueled anxieties about China's accelerating technological self-reliance.