South Korea Stocks Suffer ‘Black Thursday’ Panic as Kospi, Kosdaq Tumble More Than 7%

South Korea’s Kospi and Kosdaq indexes each tumbled more than 7% on October 15. The sharp selloff triggered sell-side sidecars in both markets, followed by circuit breakers.

The Kospi closed at 5,554.27, down 454.59 points, or 7.57%, from the previous session. After opening 5.59% lower, the index at one point extended its loss to more than 9% intraday.

The Kosdaq finished at 760.82, down 63.06 points, or 7.65%, from the prior close. It opened 4.79% lower and also at one point fell more than 9% during the session.

Sidecars, which temporarily suspend the validity of program sell orders, were triggered in both markets shortly after trading began. In the afternoon, first-stage circuit breakers were activated, halting trading for 20 minutes.

The Korea Exchange activates a first-stage circuit breaker when the Kospi or Kosdaq falls at least 8% from the previous day’s close for one minute. It was the first simultaneous activation of first-stage circuit breakers in the two markets in about two and a half months, since late July.

The decline came after U.S. consumer inflation topped expectations, heightening pressure for further interest-rate increases. The U.S. consumer price index rose 3.7% in September from a year earlier, above the market estimate of 3.6%. According to CME FedWatch, the probability of a Federal Reserve rate increase this month jumped into the 30% range on October 15 from the 20% range a day earlier.