'Middle East shock' triggers KOSPI sell-side circuit breaker… Samsung Electronics -7%, SK Hynix -8%

The KOSPI plunged shortly after the open on the 9th, triggering a sell-side circuit breaker (temporary suspension of program sell orders).

As of 9:30 a.m., the KOSPI was down 6.99% from the previous session, trading at 5,196.05. According to the Korea Exchange, the move in KOSPI 200 futures prompted the sell-side circuit breaker at around 9:06 a.m. for five minutes. At the time, KOSPI 200 futures were down 6.49% from the prior close at 773.90. The sell-side circuit breaker is triggered when KOSPI 200 futures fall by more than 5% and the decline persists for one minute.

So far, individual investors are the sole net buyers in the KOSPI market, purchasing a net 1.371 trillion won. Foreigners posted net sales of 835.1 billion won, and institutions sold a net 556.2 billion won.

The KOSDAQ is also down. It was trading at 1,095.63, down 5.11% from the previous session. Individuals sold 21.3 billion won and foreigners sold 1.4 billion won, while institutions are net buyers of 49.9 billion won.

U.S. stocks also weakened on the last trading day of last week. On June 6 (local time), the Dow Jones Industrial Average fell 0.95% from the previous session on the New York Stock Exchange, while the S&P 500 lost 1.33% and the Nasdaq 100 dropped 1.59%.

The biggest factor rattling markets is the surge in international oil prices. This follows the effective closure of the Strait of Hormuz due to the war with Iran. Oil prices quickly topped $100 per barrel. Rising oil prices are stoking inflation fears, weighing on equities.

So far, the top market-cap stocks on the KOSPI are all lower. Samsung Electronics was trading at 173,500 won, down 7.81%. SK Hynix was down 8.33% at 847,000 won. Hyundai Motor (-8.86%), Samsung Electronics preferred (-7.11%), LG Energy Solution (-4.37%) and Hanwha Aerospace (-2.16%) were also weak.

Reporter Yang Ji-yoon yang@hankyung.com