Technology and Artificial Intelligence (AI) stocks across Asian markets saw heavy profit-taking on June 23, 2026. The biggest impact was seen in South Korea, where the stock market came under intense selling pressure and briefly moved toward crash territory.

South Korea’s benchmark KOSPI index fell more than 8 percent during intraday trading and at one point was down nearly 10 percent. The sharp decline hit some of the country’s biggest technology companies. Shares of chipmaker SK Hynix dropped more than 11.5 percent, while Samsung Electronics fell around 8.7 percent.

Trading Halted as Circuit Breaker Kicks In

As selling intensified and the KOSPI index slipped beyond the 8% mark, the Korea Exchange activated a circuit breaker at around 2:33 PM local time. Trading across the market was suspended for 20 minutes. A circuit breaker is an emergency safety mechanism used by stock exchanges around the world to prevent panic-driven market crashes. It temporarily pauses trading when markets fall beyond a pre-defined limit.

The sharp fall in South Korea also affected other Asian markets, including India. After a strong rally in recent weeks, many investors chose to book profits and move to safer positions, leading to broad-based selling across regional markets.

Just Like the MCB in Your Home

A circuit breaker in the stock market works much like the Miniature Circuit Breaker (MCB) installed in homes. When a short circuit occurs, the MCB automatically cuts off electricity to prevent damage. Similarly, when stock markets witness extreme panic selling and an index falls beyond a certain level, trading is temporarily stopped to prevent a deeper crash.

Why Are Circuit Breakers Used?

Market experts say circuit breakers serve three major purposes:

1. Cooling-Off Period

When markets fall sharply by 8%, 10%, or more, investors often panic. A temporary trading halt gives market participants time to assess the situation calmly and avoid making emotional decisions.

2. Preventing a Market Meltdown

During periods of extreme volatility, millions of computers and trading algorithms may trigger automatic sell orders simultaneously. Circuit breakers help stop this chain reaction and reduce the risk of a market-wide collapse.

3. Understanding the Real Cause

The pause also gives regulators, traders, and investors time to analyze whether the fall is driven by genuine concerns or simply by rumors and panic.

South Korea’s Three-Level Circuit Breaker System

South Korea follows a three-tier circuit breaker mechanism:

• Level 1: 8% decline
• Level 2: 15% decline
• Level 3: 20% decline

On Tuesday, the first level was triggered when the KOSPI index dropped more than 8%, resulting in a 20-minute suspension of trading.

What Is a ‘Sidecar’ in the Stock Market?

Earlier in the day, South Korean authorities had also activated a Sidecar, another market protection tool similar to a circuit breaker. A sidecar is used when markets experience sudden and extreme volatility, especially due to large institutional investors such as foreign funds and banks executing massive program or algorithmic trades.

How Does a Sidecar Work?

When a sidecar is triggered:

• Automatic program trading is temporarily halted.
• Algorithm-based trading by large investors is restricted or slowed down.
• Retail investors get additional time to evaluate market conditions and make informed decisions.

The goal is to reduce excessive volatility and prevent automated trading systems from worsening market declines. On June 23, the KOSPI market imposed a sidecar that temporarily suspended automatic program trading for five minutes before the broader circuit breaker was activated later in the session.

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