KOSPI plunges 8% and Korea halts trading for 20 minutes

What happened. According to Reuters, the KOSPI fell more than 8% in Friday's first minutes to 4,911.28, the lowest since February 6. At 9:03 a.m. Seoul time (00:03 GMT) the Korea Exchange triggered a 20-minute circuit breaker. That is a rule: if the index falls 8% from the previous close, all stock and derivatives trading pauses so the market can catch its breath. Yonhap says this was the tenth time in 2026 the exchange used such a pause.

What came next. The fall narrowed after the pause. Reuters says the KOSPI was down 3.9% at 5,174.84 by 02:30 GMT. Foreign investors sold 1.1 trillion won of shares, while retail investors bought 130 billion won and institutions 780 billion won. Samsung Electronics was down 3.23% and SK hynix 5.30% at that point, after earlier drops of more than 10% and 13%.

Government response. Reuters reports that Finance Minister Lee Hyoung-il held an emergency meeting. Officials decided to temporarily ease rules for retail investors who trade with borrowed money. The aim is to limit forced selling, when a broker closes a position because the collateral is too small.

Across Asia. Investing.com reports Japan's Nikkei 225 fell as much as 7.1% and is more than 20% below its June record. A drop like that is called a bear market. Taiwan's index lost 4.1%, and TSMC shares fell more than 4%.

Why. On Thursday in the US the S&P 500 fell 4.4%, the Nasdaq 5.5% and the chip index 12.3%. Reuters and Investing.com link the selloff to the midterm results: investors fear Democrats will tighten oversight of data centers. That is the reading of markets and analysts, not a decision by Congress.

Confirmed facts

• On November 6 the KOSPI fell more than 8% in early trade to 4,911.28, the lowest since February 6.^[1][3]
• At 9:03 a.m. Seoul time (00:03 GMT) the exchange triggered a 20-minute circuit breaker, halting stock and derivatives trading.^[1][2]
• According to Yonhap, it was the tenth time in 2026 the exchange used such a pause.^[2]
• By 02:30 GMT the KOSPI was down 3.9% at 5,174.84.^[1]
• Foreign investors sold 1.1 trillion won of shares; retail investors bought 130 billion and institutions 780 billion won.^[1]
• Finance Minister Lee Hyoung-il held an emergency meeting and decided to temporarily ease leverage rules for retail investors.^[1]
• The Nikkei 225 fell as much as 7.1% and is more than 20% below its June record.^[3]
• On Thursday the S&P 500 fell 4.4%, the Nasdaq Composite 5.5% and the Philadelphia Semiconductor Index 12.3%.^[3]

Implications

• ConfirmedThe US tech selloff spread to Asia, hitting Korea, Japan and Taiwan hardest.
• Our readingIf foreign selling continues, chipmaker stocks may stay under pressure. This is our view, not a forecast.
• Our readingLinking the drop to the US vote is the market's reading; no data center laws exist yet. This is our view.

Still unknown

• Where the KOSPI and Nikkei close on Friday
• Whether foreign investors keep selling
• What data center rules the new Congress actually passes

Who it affects

South Korea, Japan, Taiwan, United States. People holding chipmaker stocks, Asia funds or tech ETFs

Sources

1. Reuters: South Korea stocks hit 9-month low as US midterm results spark AI selloff November 6, 2026 · media
2. The Korea Herald (Yonhap): Trading of KOSPI stocks suspended amid tech sell-off November 6, 2026 · media
3. Investing.com: Asia stocks tumble as AI rout batters Japan, S. Korea November 6, 2026 · media