Seoul stocks sink, trigger first circuit breaker for 5 min in 8 years
SEOUL (The Korea Herald/ANN) - The Kospi plummeted more than 5 per cent during Thursday trading, which triggered the stock exchange to temporarily halt trading on Korea’s main bourse, as investor sentiments weighed on the coronavirus pandemic.
The Korea Exchange activated a “sidecar,” meaning it temporarily halted the trading of shares, for five minutes around 1:04 p.m. after Kospi 200 index futures slipped over 5 percent. It was the first time the sidecar had been activated for the Kospi since Oct. 4, 2011, when Greece defaulted on its debts.
“The temporarily halt trading was due to the plunging of the Kospi 200 index futures. They plummeted from 256.90 points to 243.90 points -- down 13 points, or 5.06 percent at that time for over a minute,” a KRX official said.
The sidecar scheme was adopted in the benchmark Kospi market in November 1996. It halts futures trading of equities during periods of huge market volatility. It limits program trading to cool down a buying or selling spree. The trigger point for the secondary bourse Kosdaq is 6 percent.
The Kospi opened low at 1,887.97 -- falling 20.30 points, or 1.06 percent, from the previous session’s close. The index fell sharply to reach 1808.56 just around 1:00 p.m., which is the lowest level since 1,800.75 on Aug. 24, 2015. The index did not recover much from its weak start, closing at 1,834.33.
The tech-heavy Kosdaq also began at 589.20 -- down 6.41 points, or 1.08 percent, from the previous session. The index fell to 555.47 points during the trading session, then recovered slightly to close at 563.49.
The local currency closed at 1206.5 won against the greenback -- down 13.5 won from the previous session’s close. It was the Korean currency’s biggest fall against the dollar since a drop of 17.3 won on Aug. 5.