KOSPI circuit breaker triggered by SK hynix plunge
13In Korea, a sell-side sidecar and a circuit breaker were triggered one after another on the KOSPI as major semiconductor stocks such as SK hynix plunged during the session.1Experts said the main causes were ADR profit-taking, the unwinding of leveraged positions, and worsening investor sentiment.
13In Korea, a sell-side sidecar and a circuit breaker were triggered one after another on the KOSPI as major semiconductor stocks such as SK hynix plunged during the session,1temporarily halting trading.
Intraday volatility emerged as heightened geopolitical risks in the Middle East coincided with a slump in major stocks.
Researcher Kim Seok-hwan of Mirae Asset Securities interpreted the plunge in SK hynix as the result of both pressure from earnings expectations and supply-demand factors.
He diagnosed the widening decline as being driven by a tangled supply-demand situation, including the unwinding of leveraged positions. Analyst Kim said this move is difficult to see as an immediate deterioration in fundamentals.
Lee Sun-yeop, CEO of AFW Partners, said deteriorating investor sentiment was the key cause. He explained that profit-taking orders poured in after the Nasdaq listing of the SK Hynix ADR, and that concerns over peak earnings and geopolitical uncertainty overlapped.
Both experts pointed out that sentiment and supply-demand factors greatly increased market volatility.
During the session, circuit breakers and sidecars were triggered, prompting position liquidations and causing the index plunge to widen rapidly in a short time.
The experts quoted in the article said it is necessary to closely monitor sentiment and supply-demand trends for the time being.
Sources: 연합인포맥스
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