KOSPI and KOSDAQ Hit Circuit Breakers: A 'Black Monday' for the Stock Market

[Anchor]

The KOSPI plunged more than 8% today (June 8), closing at the 7,400 level. Circuit breakers were triggered on both the KOSPI and KOSDAQ, forcibly halting trading for 20 minutes.

Here is the report by Baek Woon.

[Reporter]

The KOSPI saw its losses widen immediately after the opening bell, falling more than 8% within just three minutes of the start of the regular trading session.

A circuit breaker was triggered, suspending trading for 20 minutes.

This is the first time a circuit breaker has been triggered in the KOSPI market in three months, since shortly after the outbreak of the Middle East war in March.

Although the KOSPI briefly pared some of its losses, it ultimately closed at 7,484, down 8.3%.

While individual investors net-purchased 1.7 trillion won, institutions and foreign investors net-sold 1.6 trillion won and 350 billion won, respectively, dragging down the index.

The 'Black Monday' in the stock market was driven by concerns over U.S. monetary tightening and a sharp decline in semiconductor stocks.

Earlier, strong U.S. employment data confirmed the possibility of interest rate hikes. Concerns that rising interest rates would dampen AI investments by U.S. big tech companies led to a drop of more than 10% in the Philadelphia Semiconductor Index.

In the aftermath, Samsung Electronics fell more than 10%, losing the 300,000 won level, while SK Hynix dropped more than 7%, falling below the 2 million won mark.

The KOSDAQ index also saw a circuit breaker triggered, plummeting more than 9% and falling below the 1,000 level.

[Kim Dong-won / Head of Research, KB Securities: The index has risen 100% this year. Because of that, the correction is deep and steep. Considering the gains made so far, it can be interpreted as a correction due to overheating.]

Following a 5% drop last Friday, the KOSPI's sharp decline today has heightened concerns over losses for individual investors who borrowed money to invest aggressively.

With the balance of credit loans used for stock investments nearing 38 trillion won, a significant drop in stock prices triggers forced liquidations, where brokerage firms sell off held stocks.

The loss rate for single-stock leveraged ETFs, which have recently attracted significant capital, has neared 40% over the past three trading days.

[Kim Jae-seung / Researcher, Hyundai Motor Securities: In a situation where the proportion of high-risk investments is increasing, while they can push prices up strongly when the market rises, they also cause prices to fall much faster when the market drops.]

Online, posts verifying losses have been appearing, while some have expressed opinions that they would use the sharp decline as a buying opportunity.

(Video reporting: Kim Nam-sung, Kim Young-hwan | Video editing: Kim Yoon-sung | Graphics: Park Tae-young)
※ Please note: This article was translated by AI and may contain errors.