Kospi opens 5.6% lower, triggering a trading curb for the second time this week

Second sidecar in three sessions

South Korea's Kospi opened Thursday, October 15, down 335.80 points, or 5.59%, at 5,673.01, according to Korea JoongAng Daily, which cited Yonhap. The Korea Exchange suspended program trading for Kospi-listed shares for five minutes from 9:08 a.m. local time, a so-called sell-side sidecar that activates when Kospi 200 futures fall 5% or more for at least one minute. ^[4]

Digital Today reported that Kospi 200 futures had dropped 5.27% to 892.58 when the curb took effect. A few minutes into the session, Samsung Electronics was down 6.03% at 218,000 won and SK hynix was down 7.61% at 1,311,000 won, the outlet said. The Seoul Economic Daily reported that the index was trading near its July 29 close of 5,663.24 and that a lower finish would extend the losing run to seven sessions, the longest since September 2024. Thursday's session was still under way at the time of writing. ^{[5] [9]}

Why US searches rose

The Korean sell-off has spilled into US trading this week. Yahoo Finance reported on Tuesday that Micron shares fell about 4% in early trading, and the Associated Press said Micron ended the day down 3.6%, the heaviest drag on the S&P 500. On Wednesday, the S&P 500 fell 1.11% and the Nasdaq Composite 1.88%, Korea JoongAng Daily reported, after September consumer prices rose 0.6% from August and 3.7% from a year earlier, above the 3.6% economists expected. ^{[7] [8] [4]}

Tuesday's rout

The Kospi closed Tuesday, October 13, at 6,035.35, down 5.46%, after falling more than 7% intraday, according to Korea JoongAng Daily and The Korea Herald. The Korea Exchange also triggered a sell-side sidecar that day, the first in nearly two months. Samsung Electronics fell 7.39% to 232,000 won and SK hynix 10.09%, the Herald reported. ^{[1] [2]}

Reports linked the losses to China's ChangXin Memory Technologies, which said it had made key progress on a new DRAM cell design and aims to ship server memory based on it by the end of 2026. Forbes, citing Bloomberg, also pointed to comments by Broadcom Chief Executive Hock Tan, who said some AI investors arrive with extreme expectations only to find it is "almost like they are in a casino." Samsung, SK hynix and Micron together hold about 90% of the DRAM market, according to Yahoo Finance. ^{[6] [7] [1]}

The index fell another 0.44% on Wednesday to 6,008.81, giving up an intraday gain of as much as 2.57%, The Korea Times reported. Foreign investors were net sellers for a seventh straight session. ^[3]

From record to retreat

The Kospi set a record close of 8,864.24 on June 17, according to SBS. Thursday's opening level is about 36% below that peak. The Korea Herald reported that the index was still up 51% for the year as of Monday's close, a figure that predates the latest losses. ^{[10] [2]}

What comes next

Analysts quoted by Digital Today pointed to Taiwan Semiconductor Manufacturing's quarterly results, due later Thursday, as a test of sentiment toward chip stocks. Kim Jae-seung of Hyundai Motor Securities told The Korea Times that foreign buying could return gradually around late-October earnings reports and the US midterm elections in early November. No statement from South Korea's government or central bank on this week's decline was found in reports reviewed. ^{[5] [3]}