Kospi plunges below 7,500 in 'Black Monday' rout

South Korean stocks tumbled Monday under a double blow from a sharp selloff in US semiconductor shares and a surging won-dollar rate. The Kospi plunged as far as the 7,400 range during trading, breaking below the 8,000 level, while the won-dollar rate soared past 1,555 won — its highest since the global financial crisis.

A circuit breaker was triggered on the Kospi just three minutes after the opening bell, and a sell-side sidecar was activated on the Kosdaq, sending markets into a panic from the outset. Analysts said the combination of a weak won, elevated oil prices and high interest rates — compounded by a massive global flow of funds into the SpaceX IPO — weighed heavily on investor sentiment toward large-cap domestic semiconductor stocks.

According to Korea Exchange, the Kospi was trading at 7,678.09 as of 10 a.m. Monday, down 482.50 points, or 5.91 percent, from the previous session. The index fell more than 8 percent within the first minute of trading, triggering a 20-minute circuit breaker halt at 9:03:42 a.m. At its intraday low, the benchmark touched 7,442.73, surrendering the 7,500 level. It was the ninth time in history that a Kospi circuit breaker had been triggered, and the first since March 9 — roughly three months ago. Foreign investors net sold more than 700 billion won (about $454 million) on the day, extending their streak of consecutive net selling to 21 trading sessions.

Samsung Electronics and SK Hynix each fell nearly 10 percent from the previous close in early trading, with Samsung dropping below 300,000 won per share and SK Hynix falling below 2 million won.

The Kosdaq also extended its steep decline. At the same time, the Kosdaq stood at 945.09, down 57.35 points, or 5.72 percent, from the previous session. A sell-side sidecar was also activated on the Kosdaq around 9:06 a.m.

The won-dollar rate added to the pressure on markets. It opened at 1,555.2 won per dollar in the Seoul foreign exchange market Monday, up 16.1 won from the previous session — the highest opening rate in roughly 17 years, since March 6, 2009 (1,590 won), during the global financial crisis.

The won has remained elevated since the outbreak of the Iran war in late February, resisting even forceful verbal intervention by currency authorities in recent weeks. The rate has closed above 1,500 won for 14 consecutive trading sessions — the second-longest such streak on record, trailing only the 49 consecutive sessions logged in late 1997 and early 1998 during the foreign exchange crisis. The current run has already surpassed the nine consecutive sessions recorded in March and April immediately after the Iran war broke out, as well as the 11 sessions in February and March 2009 during the global financial crisis.

The monthly average rate also climbed sharply, jumping from 1,448.4 won in February — just before the Iran war — to 1,492.5 won in March, before easing slightly to 1,485 won in April and rising again to 1,491.3 won in May. The average for June, through Friday, stood at 1,522.4 won.

Currency authorities believe the current rate level is excessive given recent economic conditions, and say the present high-rate environment is fundamentally different from past crises such as the foreign exchange crisis or the global financial crisis.

By Song Ha-jun and Kim Byeo-ri