Korea's KOSPI Index plunged more than 7% during trading on June 26, triggering a programmed sell order halt (sidecar mechanism). This marks the 14th sidecar activation this year and the 5th this month. Foreign investors net sold 2.8 trillion KRW, institutions net sold 580 billion KRW, while individual investors net bought 3.35 trillion KRW; the KRW/USD exchange rate rose to 1,549 KRW.
Programmed Sell Order Halted for 5 Minutes, 14th Sidecar Trigger This Year
The KOSPI 200 futures index fell 72.88 points (5.00%) from the previous day's closing price of 1,382.00 points around 11:12 AM, triggering the sidecar mechanism, which suspended programmed sell orders for 5 minutes. The sidecar is triggered when the KOSPI 200 futures rise or fall by 5% or more from the previous trading day's close, and the condition persists for at least one minute; buy orders are restricted during upward moves, and sell orders during downward moves. This is the 14th trigger this year and the 5th this month.
Notably, on the previous day (June 25), a buy-side sidecar was triggered just after the KOSPI surged, and today a sell-side sidecar was triggered in the opposite direction, indicating a sharp increase in market volatility.
Foreign Investors Net Sell 2.8 Trillion KRW; Samsung Electronics and SK Hynix Both Fall About 8%
As of 11:53, on the main board, foreign investors net sold 2.8 trillion KRW, institutions net sold 580 billion KRW (with the National Pension Fund net selling 79 billion KRW), and individual investors net bought 3.35 trillion KRW. Most top market-cap stocks weakened: Samsung Electronics and SK Hynix both fell about 8%, and SK Square dropped nearly 11%.
The KOSDAQ index stood at 849.59, down 38.22 points (4.30%). Semiconductor materials, parts, and equipment stocks were relatively strong, with Wonik IPS, PSK, EO Technics, and SIMMTECH continuing to rise.
Kiwoom Securities: Apple's Plunge Sparks Fears of Hyperscale Data Center CapEx Cuts
Han Ji-young, an analyst at Kiwoom Securities, said, "In overnight U.S. markets, Apple shares plunged about 6% amid concerns that rising memory prices would lead to higher product prices, ultimately shrinking product demand." She added that this has sparked worries that not only consumer goods companies but also hyperscale data center firms may struggle to absorb higher memory expenses, potentially curbing their capital expenditure appetite.
Han also noted that the KOSPI had rebounded about 8.9% over the previous two trading days, triggering short-term profit-taking, and side effects from semiconductor concentration adjustments have reappeared.
FAQ
What is the KOSPI sidecar mechanism, and what triggered it today?
The sidecar mechanism is a program trading halt: when the KOSPI 200 futures rise or fall by 5% or more from the previous trading day's close and persist for at least one minute, programmed buy (on rises) or sell (on falls) orders are suspended for 5 minutes. Today (June 26) at 11:12 AM, the KOSPI 200 futures fell 5.00%, triggering a sell-side sidecar, the 14th this year and 5th this month.
What are the main reasons for today's sharp KOSPI decline?
Kiwoom Securities analyst Han Ji-young cited two key factors: first, Apple shares fell over 6% overnight (due to concerns that rising memory costs would lead to higher product prices), raising fears that hyperscale data centers might cut capital expenditures; second, the KOSPI rebounded about 8.9% over the previous two sessions, triggering short-term profit-taking and side effects from semiconductor concentration adjustments.
What is the net flow of foreign investors on the main board today?
As of 11:53 AM, foreign investors net sold 2.8 trillion KRW, institutions net sold 580 billion KRW (with the National Pension Fund net selling 79 billion KRW), and individual investors net bought 3.35 trillion KRW.
