South Korea’s financial authorities convened an emergency market meeting on the evening of July 29, 2026, after the country’s benchmark KOSPI index shed a staggering 864.5 trillion won in market value over just two trading sessions.
The emergency session, which began at 6:00 p.m. local time, was hosted by Finance Minister Koo Yun-cheol, as reported by Bloomberg. Key policymakers joined the meeting, including Bank of Korea Governor Shin Hyun-song, Financial Services Commission (FSC) Chairman Lee Eog-weon, and Financial Supervisory Service (FSS) Governor Lee Chan-jin. The high-level gathering followed intense questioning of financial officials by lawmakers in parliament earlier that day.
The KOSPI index closed at 5,663.24 on Wednesday, down 5.98%, triggering a market-wide circuit breaker for the second consecutive day. The Korea Exchange halted trading on both July 28 and July 29, marking the first time in its history that consecutive circuit breakers were activated in successive sessions. Over those two days, the index plunged by 1,092.51 points, losing 600.33 trillion won on Tuesday and an additional 264.20 trillion won on Wednesday. Over the past month, the KOSPI has dropped 32.54%.
During parliamentary hearings, lawmakers attributed a significant portion of the extreme volatility to single-stock leveraged Exchange-Traded Funds (ETFs) launched in May. Critics argued these leveraged products magnified price swings by channeling speculative trading into a small group of blue-chip stocks, leaving South Korean equities highly volatile compared to global peers. Finance Minister Koo apologized during a hearing, acknowledging that these products required more thorough analysis before their launch, though he maintained they were only one of several contributing factors. Koo stated that while a package of measures is already active, the government is prepared to introduce additional steps to normalize the market if necessary.
The massive selloff was further exacerbated by disappointing corporate earnings from key technology heavyweights. SK Hynix missed analyst expectations despite posting record quarterly performance. The chipmaker’s second-quarter revenue of 79.3 trillion won fell short of the LSEG SmartEstimates forecast of 84 trillion won, while its operating profit of 60.54 trillion won missed the projected 64 trillion won. Consequently, SK Hynix shares fell 9.61% to close at 1,401,000 won. Meanwhile, Samsung Electronics dropped 5.23% to close at 208,500 won. Over the past month, Samsung and SK Hynix have lost 35.45% and 46.69% of their market value, respectively.