As the KOSPI index plunged and traded below 5,000 points, a sell-sidecar was triggered after KOSPI200 futures (nearest month) fell more than 5% for over 1 minute, suspending the validity of program-trading sell quotes. From the moment the sell-sidecar was activated, the validity of program sell quotes was halted for 5 minutes and then automatically lifted, but the steep declines in spot and futures prices have continued.

As of 1 p.m. on the 2nd, the KOSPI index was down around 5% from the previous trading day, trading around 4,900 points. The KOSPI started the session at 5,122.62, down 101.74 points (1.95%) from the previous trading day, and while the early gains appeared to narrow, losses soon deepened and the index fell below 5,000 points.

On the 2nd, as the KOSPI opens lower, an electronic board in the dealing room at Hana Bank's headquarters in Seoul shows early market moves. /Courtesy of News1

While foreigners are net selling about 2.4 trillion won, individuals are net buying about 3.5 trillion won, but it has not been enough to defend the index. In the KOSPI200 futures market, foreigners are also posting large net sales of more than 1 trillion won.

The KOSDAQ index, which opened lower and attempted a rebound in the morning, is also in a steep slide. As of 1 p.m., the KOSDAQ index had plunged more than 4% and was trading around 1,090 points.

Over the weekend, news that U.S. President Donald Trump had nominated Kevin Warsh, known as a "hawk" (prefers monetary tightening), as chair of the Federal Reserve sent global risk assets lower across the board. U.S. stocks ended down, and gold and silver, which had surged recently, saw an unusual plunge.

Asian markets are also broadly weaker, but the decline in Korean stocks is much larger. As the domestic market had been strong recently, the pullback appears to be sharper.

Lee Jae-won, a researcher at Shinhan Investment & Securities, said, "In January, with the index rising on every trading day except two sessions, most of the Korea Exchange entered overbought territory," and noted, "Last week's 'Warsh shock' is prompting profit-taking."

Among the top market-cap stocks on the Korea Exchange, most are posting sharp losses except for a few such as Hana Financial Group and Woori Financial Group. Stocks that led the recent rally, including Samsung Electronics, SK hynix, and SK Square, are seeing large declines.

※ This article has been translated by AI. Share your feedback here.