Kosdaq Sell Sidecar Triggered as Index Slumps More Than 6%

The Kosdaq index slumped more than 6% intraday on July 14, falling below the 750 level. The drop triggered a temporary halt in program sell orders, known as a sidecar.

The Korea Exchange announced at 12:06:33 p.m. on July 14 that it had activated a sell sidecar in the Kosdaq market. It was the first Kosdaq sell sidecar in four trading days, after the previous one was triggered on July 8.

Under the mechanism, program sell orders are suspended for five minutes when the Kosdaq 150 futures index falls more than 6% from the previous session's close and the Kosdaq 150 cash index drops more than 3% for at least one minute. At the time of the trigger, the Kosdaq 150 futures index had fallen 6.08%, or 84.70 points, from the previous close to 1,306.80. The Kosdaq 150 cash index was down 6.25%, or 86.69 points, at 1,298.20.

On July 13, the Kospi plunged 8.95%, triggering both a sell sidecar and a circuit breaker, while the Kosdaq fell 4.55% and held up relatively better. On July 14, however, battery and biotech stocks, two of the Kosdaq's main sectors, also turned sharply lower, sending the index to a steeper loss than the Kospi.

Kim So-yeon, Hankyung.com reporter sue123@hankyung.com