Following a series of negative announcements regarding the AI (artificial intelligence) industry in U.S. stock markets overnight, and with the U.S. September CPI (consumer price index) exceeding expectations, both major markets plunged by more than 8%, triggering Level 1 circuit breakers simultaneously. In the early trading hours, sell sidecar (futures market circuit breaker) alarms were also sounded in both markets.
The Korea Exchange triggered a Level 1 circuit breaker in the KOSDAQ market at 12:23 p.m. on the 15th. At the time of the circuit breaker activation, the KOSDAQ index had fallen 66.00 points (8.01%) from the previous day to 757.88. Following the KOSDAQ, a Level 1 circuit breaker was triggered in the KOSPI market 16 minutes later at 12:38 p.m. At the time of the circuit breaker activation, the KOSPI index showed 5528.05, down 480.76 points (8.00%) from the previous trading day. The KOSPI index falling to the 5500th range is the first time since April 7.
This is the 10th circuit breaker triggered in the KOSPI market this year, and the 16th in history. In the KOSDAQ market, it is the 5th this year and the 15th in history. The triggering of a circuit breaker in domestic stock markets marks the first time in 51 trading days since July 29. On July 29 as well, Level 1 circuit breakers were triggered in both markets.
Circuit breakers are operated in three stages. A Level 1 activation occurs when the index falls by more than 8% from the previous day for at least one minute, halting all trading for 20 minutes. If the index then falls by more than 15%, a Level 2 activation is triggered, also halting trading for 20 minutes. If the index falls by more than 20% from the previous day, a Level 3 activation is triggered, ending stock trading for that day.
At 9:07 a.m. on this day, a temporary suspension of program sell orders was triggered in the KOSPI market, and at 9:12 a.m., it was triggered in the KOSDAQ market. This marked the first time since July 29 that sell sidecar alarms were sounded simultaneously in both major markets. In the KOSPI market, this is the 27th sell sidecar of the year, and in the KOSDAQ market, it is the 15th of the year.
At the time of the sidecar (futures market circuit breaker) activation, KOSPI 200 futures were at 892.58, down 49.68 points (5.27%) from the previous day. At the same time, the KOSPI index showed 5782.85, up 288.07 points (5.24%) from the previous trading day. At the time of the sidecar (futures market circuit breaker) activation, KOSDAQ150 futures were at 1317.20, down 87.90 points (6.25%) from the previous trading day. At the same time, the KOSDAQ150 spot index showed 1312.01, down 91.59 points (6.52%) from the previous trading day.
The sidecar is a market stabilization device that suspends the validity of program trading orders for five minutes. The KOSPI sidecar is triggered when the price of KOSPI 200 futures rises or falls by more than 5% from the previous day's closing price and this state persists for at least one minute. In the KOSDAQ market, the sidecar is triggered when the price of KOSDAQ150 futures rises or falls by more than 6% from the previous day's closing price and this state persists for at least one minute.
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