KOSPI 7,800line collapse triggers a sell-sidecar
The KOSPI 6 month, 10 day, saw a sell-sidecar activation, with the 7,800line collapsing and falling about 4%. Weakness in large technology stocks and tensions in the Middle East were the main factors.
The KOSPI plunged early in the session when a sell-sidecar was triggered on 6 month, 10 day. During the session, the index fell about 7,800line collapsing and 4%. The Korea Exchange announced that it had activated a sell-sidecar. A sell-sidecar is a device that operates automatically to restrict program selling.
The session opened 197.16points lower at 7,899.77. The decline widened immediately after the open, making trading unstable. Volatility increased as some program trades entered the market. The exchange announced that it was monitoring the situation during the session.
Heightened tensions in the Middle East weakened global investor sentiment the previous night. Coupled with weakness in U.S. technology stocks, this put downward pressure on South Korean equities. Related issues were reportedly weak in the premarket. Investor sentiment broadly contracted.
Among large-cap stocks, Samsung Electronics fell in early trading 3% . SK hynix declined in early trading 4% . Weakness centered on large technology stocks intensified the index’s downside. The broad-based weakness among the top market-cap stocks affected the index.
The KOSDAQ showed an upward trend on buying interest in some small- and mid-cap stocks. Buying was concentrated in biotechnology and some IT stocks. As a result, the session trends of the KOSPI and KOSDAQ diverged. Some stocks saw significant price volatility.
NVIDIA-related stocks rose during the session amid expectations surrounding remarks by Jensen Huang. Subsequently, amid increased volatility in the stock market, simultaneous declines were confirmed across the group of related stocks. The range of gains and losses among the related stocks widened considerably. Some investors engaged in short-term trading more frequently.