The KOSPI is plunging after breaching the unprecedented 8,000-point milestone, as foreign investors moved to lock in profits. The benchmark index has fallen nearly 400 points, with volatility intensifying to the point that a sell-side sidecar was triggered amid declines in KOSPI futures.
According to the Korea Exchange (KRX) on Wednesday, the KOSPI was trading at 7,625.19, down 356.22 points or 4.46%. The index opened at 7,951.75, down 29.66 points or 0.37%, but reversed course after the open to surpass 8,000 points. As soon as it crossed that threshold, profit-taking sales emerged, sending the index as low as 7,587.35 during the session.
The plunge triggered a sidecar — a temporary suspension of program sell orders — for the first time in a month. According to the KRX, program sell orders were halted for five minutes at around 1:28:49 p.m. due to movement in the KOSPI 200 futures index. At the time of activation, the KOSPI 200 futures index stood at 1,182.00, down 63.50 points or 5.09% from the previous close. The last sell-side sidecar on the KOSPI was triggered on the 2nd of last month. A sell-side sidecar is activated when the KOSPI 200 futures index falls 5% or more and the decline lasts for one minute.
On the main bourse, retail investors net purchased 4.59 trillion won worth of shares, while foreign and institutional investors net sold 4.25 trillion won and 399 billion won, respectively, dragging the index lower. Foreign investors have offloaded a combined 24.67 trillion won worth of stocks so far this month through Wednesday. Market participants estimate that the surge in the index has prompted portfolio rebalancing and profit-taking.
Among the top market-cap stocks on the main bourse, all are declining except for Samsung Electro-Mechanics (009150.KS), which is up 0.20%. Samsung Electronics (005930.KS) and SK hynix (000660.KS) are down 6.42% and 5.69%, respectively. SK Square (402340.KS) is down 5.72%, Hyundai Motor (005380.KS) down 0.70%, LG Energy Solution (373220.KS) down 3.96%, Doosan Enerbility (034020.KS) down 4.87%, HD Hyundai Heavy Industries (329180.KS) down 4.47%, and Kia (000270.KS) down 3.99%.
"After U.S. President Donald Trump said he would no longer tolerate Iran, U.S. after-hours futures turned lower, and the Korean stock market's decline is widening," said Seo Sang-young, an analyst at Mirae Asset Securities.
