This market crash is a concentrated release of Korea's stock market structural imbalance.

Nearly three-quarters of the gains in the KOSPI index were contributed by Samsung and SK Hynix,
which together hold a 54% weight in the index, making it a single channel for global capital to bet on AI computing power.
Foreign investors sold over $10 billion worth of Korean stocks net in the past week,
a trend that had already emerged by the end of May, when funds like GAM Investment were forced to reduce their holdings in Samsung and Hynix due to reaching single-stock position limits.
The key detail lies in the stubbornness of leverage.
Although broker deposits (cash buffers) decreased from 137 trillion won to 121 trillion won between May 12 and 22,
margin balances rose to a record 38 trillion won on May 29.
This indicates retail investors did not actively de-leverage at high index levels, but instead relied on less cash to support larger risk exposures,
making the market structure extremely fragile.
When foreign selling coincided with profit-taking in the semiconductor industry,
the amplified sell-off driven by high leverage triggered a systemic circuit breaker.
On June 8, today, the Korean stock market continued its decline from Friday,
opening more than 8% lower and hitting the circuit breaker before trading was halted.
Reports say the Korea Exchange held an emergency meeting on Monday to assess the increasing market volatility and discuss measures to ensure market stability.
Data shows that as the KOSPI index hit a record high last week,
foreign investors have been withdrawing, net selling over $10 billion worth of KOSPI stocks in just the past week.
This selling pressure also impacted the Korean won, with the USD/KRW exchange rate reaching its lowest level since March 2009.
Additionally, data from the Korea Exchange shows that driven by AI-powered chip demand,
Samsung Electronics and SK Hynix account for up to 54% of the Korea Composite Stock Price Index (KOSPI),
with an average daily trading volume in May accounting for about half of the index.
Nearly three-quarters of the KOSPI’s gains this year came from these two companies.
When the benchmark index hit a record high last Tuesday, only 2.6% of stocks reached a 52-week high,
while 31% fell to a 52-week low.
The astonishing gains have fueled a continued rise in retail leverage.
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