South Korean stock markets experienced a significant downturn on Wednesday, with shares plummeting by over 8%, triggering temporary trading halts on both the benchmark KOSPI and the secondary KOSDAQ markets. The market volatility stemmed from heightened risk aversion following reports of US-Israel strikes on Iran.
The Korea Exchange implemented a circuit breaker, suspending KOSPI trading for 20 minutes at approximately 11:19 a.m. KST, after the index witnessed a decline exceeding 8% for more than one minute. This action followed a prior trading suspension on the KOSDAQ market, which was initiated at 11:16 a.m. KST.
A circuit breaker is automatically activated when a market index falls by more than 8% from the previous trading session’s closing level and remains at or below that threshold for a minimum of one minute.
At the time of the suspensions, the KOSPI had fallen to 5,322.93, representing an 8.1% decrease from the previous session’s closing price. Similarly, the KOSDAQ dropped to 1,045.24, marking an 8.13% loss.
This event marked the first instance of the Korea Exchange activating circuit breakers on both the KOSPI and KOSDAQ markets simultaneously since August 5, 2024.
Earlier in the trading day, the Korea Exchange had already implemented sell-side sidecars on both the KOSPI and KOSDAQ, leading to a five-minute suspension of program trading. The KOSPI sidecar was activated at 9:06 a.m. KST, shortly after the market’s opening bell, while the KOSDAQ sidecar was triggered at 10:31 a.m. KST.
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