South Korean equities cratered on June 5, pulling emerging market assets into their third consecutive day of losses. The KOSPI index closed down 5.54% at 8,161, its steepest single-session decline in recent memory, as foreign investors dumped shares and semiconductor stocks bore the brunt of a brutal selloff.
The session was ugly enough to earn the label “Black Friday” among Korean market participants. Circuit breakers were triggered in related futures trading as intraday losses spiraled.
What triggered the rout
The proximate cause was disappointing results from Broadcom in the US, which sent shockwaves through the semiconductor supply chain. In South Korea, that translated into a punishing day for the country’s two most important chipmakers.
Samsung Electronics fell over 6%. SK Hynix declined nearly 10%.
Foreign investors accelerated their selling activity throughout the session, compounding the damage. The Korean won weakened alongside equities.
Geopolitical tensions in the Middle East added another layer of risk aversion, prompting traders to take profits after the market’s prior rally.