South Korean KOSPI Plunges 5% as Fed Chair Nomination Triggers Sell‑off
Updated (2 articles)
KOSPI Falls Over Five Percent After Fed Chair Announcement The benchmark KOSPI slid 5.26% to 4,949.67, a 274.69‑point drop that ended a four‑session rally. A five‑minute sell‑side circuit breaker activated around noon. Trade volume reached 568.8 million shares worth roughly 32 trillion won ([1]).
Foreign and Institutional Investors Dump Trillions of Won Net outflows hit 2.5 trillion won from foreign investors and 2.2 trillion won from institutional investors in a single session. Retail investors, by contrast, bought a net 4.6 trillion won. The stark reversal underscores heightened risk aversion amid global uncertainty ([1]).
Gold and Silver Price Collapse Drives Derivative Liquidations International gold prices fell more than 10% and silver plunged over 30% in recent days. The KRX gold contract hit its 10% floor limit—the first such breach since March 2014—triggering margin‑call‑driven liquidations of related derivatives. The precious‑metal slump amplified the equity sell‑off ([1]).
Top Korean Blue‑Chip Stocks Record Sharp Losses Samsung Electronics dropped 6.29% to 150,400 won, SK hynix fell 8.69% to 830,000 won, and Hyundai Motor slipped 4.4% to 478,000 won. Celltrion and Hanwha Aerospace also declined, losing 3.33% and 4.69% respectively. The broad-based decline hit the market’s largest constituents ([1]).
Financial Shares Rise While Won Weakens and Bonds Yield Higher Hana Financial Group rose 3.2% to 103,300 won and Meritz Financial Group edged up 0.69% to 117,400 won, standing out as rare gainers. The Korean won weakened to 1,464.3 per U.S. dollar, down 24.8 won from the prior session. Three‑year Treasury yields rose 1.4 basis points to 3.152% and five‑year government bond yields increased 1.2 basis points to 3.448% ([1]).
Timeline
Jan 26, 2026 – The KOSPI falls 0.81% to 4,949.59, ending a three‑day rally as investors adopt a wait‑and‑see stance ahead of the Federal Reserve’s rate decision later in the week and rising U.S.–Iran tensions; foreign investors sell 1.54 trillion won and institutions sell 158.4 billion won while individuals buy a net 1.71 billion won[2].
Jan 26, 2026 – The tech‑heavy KOSDAQ jumps 7.09% above the 1,000‑point mark, its highest level in more than four years, driven by a semiconductor surge despite declines in Samsung and SK hynix[2].
Jan 26, 2026 – The Korean won strengthens sharply to 1,440.6 per USD, gaining 25.2 won as U.S. Treasury yields fall (three‑year to 3.096% and five‑year to 3.382%)[2].
Jan 26, 2026 – Samsung Electronics closes unchanged at 152,100 won while SK hynix drops 4.04% to 736,000 won; analysts note that fourth‑quarter earnings are already priced in[2].
Jan 26, 2026 – “Investors should monitor upcoming conference calls for details on HBM4 chip roadmaps,” says Han Ji‑young of Kiwoom Securities, highlighting the importance of forthcoming earnings calls for semiconductor guidance[2].
Jan 26, 2026 – Automakers Hyundai Motor and Kia fall 3.43% and 3.51% respectively, and financials KB and Shinhan dip, reflecting broader caution amid geopolitical uncertainty involving the United States, Iran, and U.S. interest in Greenland[2].
Jan 26, 2026 – The market anticipates fourth‑quarter earnings releases from Samsung, SK hynix and other majors, with conference calls expected to provide guidance on product roadmaps, especially high‑bandwidth memory (HBM4) chips[2].
Feb 2, 2026 – The KOSPI plunges 5.26% to 4,949.67, triggering a five‑minute sell‑side circuit breaker as the Fed chair nomination and a sharp drop in gold and silver prices spark a broad market sell‑off[1].
Feb 2, 2026 – Foreign investors pull out 2.5 trillion won and institutional investors 2.2 trillion won, while retail investors buy a net 4.6 trillion won, underscoring a dramatic shift in capital flows amid the turmoil[1].
Feb 2, 2026 – International gold prices tumble over 10% and silver over 30%; KRX gold hits its 10% floor limit—the first such drop since March 2014—prompting margin‑call‑driven liquidations of derivatives[1].
Feb 2, 2026 – Top‑cap stocks tumble: Samsung Electronics down 6.29% to 150,400 won, SK hynix down 8.69% to 830,000 won, Hyundai Motor down 4.4% to 478,000 won, Celltrion down 3.33% to 203,000 won, and Hanwha Aerospace down 4.69% to 1,239,000 won[1].
Feb 2, 2026 – Financial stocks emerge as rare gainers, with Hana Financial Group up 3.2% and Meritz Financial Group up 0.69% amid the broad decline[1].
Feb 2, 2026 – The Korean won weakens to 1,464.3 per USD, down 24.8 won, while three‑year Treasury yields rise to 3.152% and five‑year yields to 3.448%, reflecting tighter global financing conditions[1].