KOSPI breaks below 6,000… sell-sidecar curb triggered

A sell-side “sidecar” curb — a temporary halt to program sell orders — was triggered for the first time in about a month after the KOSPI plunged on the 3rd.

According to the Korea Exchange, program sell orders were suspended for five minutes at around 12:05:53 p.m. due to volatility in KOSPI 200 futures.

At the time of the trigger, the KOSPI 200 futures index was down 47.75 points (5.09%) from the previous session’s close to 890.05.

This was the first activation of a KOSPI sell-side sidecar in a month, since the 6th of last month.

A sell-side sidecar is triggered when KOSPI 200 futures fall by 5% or more and the decline persists for one minute.

The KOSPI opened at 6,165.15, down 1.26% from the previous session. Heavy foreign selling pushed the index below 6,000 after 11 a.m.

Concerns are mounting in the market that Iran’s Islamic Revolutionary Guard Corps (IRGC) has signaled attacks on vessels attempting to pass through the Strait of Hormuz, sending oil prices sharply higher and raising fears of a deterioration in the trade balance.

Suh Sang-young, managing director at Mirae Asset Securities, said, “Korea depends on the Middle East for about 60% of its energy imports, so if the war drags on, concerns will intensify over a widening trade deficit and greater inflationary pressure.”

Reporter Jeon Beom-jin forward@hankyung.com