BUSINESS

Seoul stocks crash 10 percent as leveraged chip ETFs unwind

PUBLISHED Jun 24, 2026, 6:23 AM ET

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South Korea’s KOSPI index suffered its largest recorded one-day fall on Tuesday, June 23, 2026, dropping 9.99% to close at 8,203.84 and triggering two circuit breakers in a single session. The selloff was led by technology shares after a rapid and disorderly unwinding of newly launched leveraged single-stock exchange-traded funds tied to memory chip makers Samsung Electronics and SK Hynix. These high-risk ETFs, introduced in late May, had expanded to about 14 trillion won (approximately $9.1 billion) in assets within weeks, with the Financial Supervisory Service disclosing that retail investors held about 92% of the exposure, magnifying the volatility in the market. South Korea’s Financial Supervisory Service Governor Lee Chan-jin warned publicly that regulators regretted allowing the rapid rollout of the 16 leveraged products, adding to alarm among investors and accelerating the retreat from tech shares. As global technology sentiment weakened early in the day, the structure of the funds, which amplified daily price movements, intensified selling pressure and contributed to the KOSPI’s historic slide. The rout in Seoul quickly spread across the Pacific, triggering a wave of selling in the United States that erased billions of dollars in market value from major semiconductor and artificial intelligence hardware companies.

By Michael Grant | JQJO News

Timeline of Events

Late May 2026 New leveraged chip ETFs launch
Late May 2026 ETF assets surge to 14 trillion
Early June 2026 Retail investors dominate ETF holdings
Early Tuesday 23 Jun 2026 Global tech sentiment weakens sharply
Tuesday 23 Jun 2026 Leveraged chip ETFs begin forced unwinds
Tuesday 23 Jun 2026 Samsung and SK Hynix shares tumble
Tuesday 23 Jun 2026 KOSPI drops nearly ten percent
Later 23 Jun 2026 US chip and AI stocks slide

News Intelligence

This South Korean stock crash impacts your wallet. If you own tech stocks or mutual funds, you may see a dip. Especially if they're tied to chip makers like Samsung or SK Hynix. Check your portfolio. Consider talking to your financial advisor.