South Korean stocks fell sharply on July 13 as US-Iran military tensions triggered a market circuit breaker. The KOSPI index dropped 4.27% to 7156.97 by 10:45 AM, with the Korea Exchange activating a sell-side circuit breaker at 10:34 AM when KOSPI 200 futures declined more than 5%—the 18th such activation this year. The downturn followed escalating confrontations between the United States and Iran that began when Iran attacked a Cyprus-flagged cargo ship off the Oman coast on May 11, followed by multiple US airstrikes and Iranian retaliatory strikes. The US Central Command announced additional airstrikes on Iran early morning of July 13, intensifying market concerns and overshadowing the previous weekend's successful Nasdaq debut of SK Hynix's American Depositary Receipt, which posted double-digit gains on its first trading day.
Korea Exchange Activates 18th Circuit Breaker of the Year
The Korea Exchange implemented a sell-side circuit breaker at 10:34 AM on July 13 after KOSPI 200 futures prices fell more than 5%. The circuit breaker mechanism temporarily halts program trading for five minutes when futures and spot prices experience rapid fluctuations, designed to moderate market overheating. Program sell orders were suspended for five minutes from the activation point and automatically resumed after the five-minute period. The KOSPI opened at 7412.03, down 0.85% from the previous trading day, and extended losses to 7156.97 by 10:45 AM, representing a 4.27% decline.
Semiconductor Stocks Lead Market Decline
Semiconductor stocks drove the index downturn on July 13. SK Hynix shares fell 9.04% to 1.983 million won, while Samsung Electronics declined 5.09% to 270,500 won as of 10:45 AM. SK Hynix had listed its American Depositary Receipt on Nasdaq the previous weekend, recording double-digit gains on the first trading day. The KOSDAQ index fell 1.00% to 828.65 at the same time.
US-Iran Military Exchanges Timeline
Iran attacked a Cyprus-flagged cargo ship passing the Oman coast on May 11. US forces conducted airstrikes across southern Iran following the ship attack. Iran subsequently attacked Jordan, Kuwait, Bahrain, and the United Arab Emirates. US military forces struck the Hormuz region in response to the Iranian attacks. The US Central Command announced additional airstrikes on Iran early morning of July 13.
Kiwoom Securities Analyst Forecasts Limited Market Impact
Han Ji-young, a researcher at Kiwoom Securities, stated that "the second-quarter earnings season is more important than macro events at this point." Han noted that "major financial stocks like Goldman Sachs and JPMorgan have expectations already reflected in recent stock price strength, so detailed earnings content is important." The analyst added that "considering the current market leaders are semiconductor and AI stocks, the influence of these financial stocks' earnings will be less than before," and projected that "in a similar context, while the recurrence of US-Iran conflict will temporarily increase oil price volatility, the actual shock to the stock market will be limited."
FAQ
What triggered the circuit breaker on the Korea Exchange on July 13?
The Korea Exchange activated a sell-side circuit breaker at 10:34 AM on July 13 when KOSPI 200 futures prices fell more than 5%. This marked the 18th circuit breaker activation of the year. The mechanism suspended program sell orders for five minutes to moderate market volatility caused by geopolitical tensions from US-Iran military confrontations.
How did semiconductor stocks perform during the July 13 market decline?
SK Hynix shares fell 9.04% to 1.983 million won and Samsung Electronics declined 5.09% to 270,500 won by 10:45 AM on July 13. The semiconductor sector led the broader market downturn despite SK Hynix's successful Nasdaq ADR debut the previous weekend, which had recorded double-digit gains on the first trading day.
What military actions occurred between the US and Iran starting May 11?
Iran attacked a Cyprus-flagged cargo ship off the Oman coast on May 11. US forces responded with airstrikes across southern Iran. Iran then attacked Jordan, Kuwait, Bahrain, and the United Arab Emirates, prompting US strikes on the Hormuz region. The US Central Command announced additional airstrikes on Iran early morning of July 13, escalating tensions between the two countries.
