KOSPI Plummets 9.99% Just One Day After Record High

[Anchor]

The KOSPI, which had just hit an all-time high, has plunged nearly 10%, falling to the 8,200 level. The sharp decline triggered a circuit breaker, temporarily halting all trading.

Reported by Lee Tae-gwon.

[Reporter]

The KOSPI started slightly lower but climbed to 9,175 early in the session before quickly turning downward.

As the losses deepened, a sell-side sidecar was triggered. By the afternoon, the index had fallen more than 8%, leading to a circuit breaker that suspended trading for 20 minutes.

Even after trading resumed, the market failed to rebound and ultimately closed at 8,203, a drop of nearly 10%.

This represents a decline of 910 points, the largest in history in terms of point drop.

The number of sidecar triggers has reached 27 this year alone, surpassing the total record set during the 2008 global financial crisis.

Although individual investors net-bought over 8 trillion won worth of stocks, it was not enough to prevent the index from falling.

The market collapsed as panic selling, primarily in semiconductor stocks, intensified amid growing expectations of a potential interest rate hike in the United States.

SK Hynix and Samsung Electronics both plummeted by 12%, closing at 2,555,000 won and 310,000 won, respectively.

Leveraged ETFs that track twice the daily performance of these two stocks also plunged by 24% to 26%.

Some point out that these leveraged products have exacerbated volatility during this sharp market correction.

The trading value of single-stock leveraged ETFs reached approximately 17.4 trillion won, accounting for one-third of the total KOSPI trading volume.

[Lee Jin-woo / Head of Research Center, Meritz Securities: There was fatigue from the market's rapid short-term gains, and as these factors overlapped, the scale of the correction widened. It appears that when leverage is concentrated in specific stocks like this, the impact is multiplied.]

Financial authorities are monitoring the sharp market volatility caused by leveraged products and are exploring potential safety measures.

Options being discussed include increasing the required deposit amounts for investing in leveraged products or strengthening investor education.

(Video reporting: Lim Woo-sik, Video editing: Lee Seung-jin, Graphics: Kang Yoon-jung & Jang Chae-woo)
※ Please note: This article was translated by AI and may contain errors.