KOSPI 4plunge in the %-range triggers successive sidecars

The KOSPI has continued to experience extreme volatility for three consecutive days. The market faced an unusual situation in which circuit breakers and sidecars were triggered in succession. During trading hours, investors experienced price movements that were difficult to predict.

The previous day, the KOSPI 4.52% lower than the previous trading day, 7,730.82to close. The index decline led to increased intraday volatility and selling dominance in some stocks. Market participants were observed unwinding their positions.

On the same day, the KOSDAQ 1.67% lower at 951.63at the close. The KOSDAQ decline was linked to selling pressure centered on small- and mid-cap stocks. Trading volume was seen to contract in some sectors.

The market has summarized that over the past few days, 8day circuit breakers were triggered, followed in succession by buy-side and sell-side sidecars. A sidecar is a system that limits buying or selling under certain conditions. This activation temporarily restricted trading in some stocks.

Market anxiety was triggered by news that Crusoe, a U.S. data center developer, had temporarily suspended work on a large data center project in Wyoming. The news affected investor sentiment in sectors related to global data centers. It became a factor that increased short-term volatility in the domestic stock market.

The securities industry assessed that this correction resulted from a combination of profit-taking and supply-and-demand factors rather than a slowdown in AI demand. Some argued that a semiconductor-centered leading-stock strategy should be maintained, citing the continued improvement in earnings. Some market participants recommended reviewing short-term positions.