KOSPI Triggers Sixth Circuit Breaker of the Year... Recovers Some Losses by Close

KOSDAQ Also Recovers Some Early Losses

The KOSPI at one point plunged by 8%, triggering a circuit breaker, but managed to recover some of its losses by the close of trading.

On this day, the KOSPI closed at 7,656.31, down 395.02 points (4.91%) from the previous session. The KOSPI index, which had been declining since the start of trading, saw a temporary trading halt on program sell orders (sidecar) at 10:23 a.m. However, as the index plummeted by more than 8% at 1:51 p.m., a circuit breaker was triggered in the Korea Exchange. This was the first time in seven trading days since June 26 that the circuit breaker had been activated, and the sixth time this year. The circuit breaker is a system that suspends all stock trading for 20 minutes if the KOSPI falls by 8% or more from the previous day's closing price for at least one minute. After a 10-minute order collection period prior to resumption, trading proceeds in a single-price auction. The index later regained some ground and closed above the 7,600 mark.

Buying by individual investors helped to limit the losses. Individuals were net buyers of 3.1343 trillion won, while foreigners and institutions were net sellers of 2.9183 trillion won and 309.2 billion won, respectively. Among institutional investors, investment trusts sold 882.6 billion won, but securities firms purchased 425.6 billion won.

On the 7th, as the KOSPI index plunged more than 4% in the early trading session, breaking below the 8,000 mark, the status of the domestic stock market was displayed on the electronic board in the dealing room of Hana Bank in Jung-gu, Seoul. 2026.7.7 Photo by Kang Jinhyung

However, some analysts noted that it was not simply institutional investors in the securities sector buying, but rather a net inflow of individual investors into Exchange Traded Funds (ETFs) that helped support the KOSPI index. Seokhwan Kim, a researcher at Mirae Asset Securities, said, "During the increased downside volatility in July, the securities sector led the overall institutional turnaround with aggressive net buying, which can be attributed to the inflow of individual investors' funds into ETFs." He added, "Individual investors took advantage of the decline to buy at lower prices, and appear to be taking 'long positions' through both spot and ETF investments."

Most sectors declined. The electrical and electronics sector fell by 6.44%, followed by transportation equipment and parts (-5.64%), securities (-4.46%), machinery and equipment (-4.37%), construction (-3.9%), and medical and precision instruments (-3.56%). In contrast, food, beverage, and tobacco (5.14%) and textiles and apparel (2.16%) rose.

Most of the top market cap stocks also fell. Hanwha Ocean, which failed to win a Canadian submarine order, plunged 22.6%. Even Samsung Electronics, which posted record results, dropped 6.9%. Samsung Electro-Mechanics (-9.8%), SK Square (-9.3%), Hanmi Semiconductor (-7%), Hyosung Heavy Industries (-6.9%), and SK hynix (-6%) also declined.

The KOSDAQ finished at 831.23, down 15.84 points (1.87%) from the previous session.

Among the top market cap stocks, performances were mixed. D&D Pharmatech surged 12.3%, and PharmaResearch (8.4%), Legochem Bio (6.5%), and SM Entertainment (6%) also posted gains. In contrast, VM (-10.3%), TES (-9.6%), Wonik IPS (-9.4%), Simmtech (-8.5%), and Jeju Semiconductor (-7.8%) fell.

Despite the sharp decline in the domestic stock market, some analysts viewed this as an opportunity to increase exposure, arguing that fundamentals remain resilient. Kyungmin Lee, a researcher at Daishin Securities, said, "While concerns have been raised about a slowdown and weakening of fundamental momentum due to the sharp decline in the domestic stock market, this has not materialized. On the contrary, improvements in earnings and upward revisions to forecasts are becoming visible, and since this is an earnings- or macro-driven market, the sharp drop caused by supply-demand factors is an opportunity to increase exposure."

This content was produced with the assistance of AI translation services.