On the 26th, the KOSPI plunged more than 8%, triggering a circuit breaker on the main board. Trading in all KOSPI-listed stocks was halted for 20 minutes. It was the first circuit breaker in three sessions since on the 23rd.
Korea Exchange (KRX) said it triggered a circuit breaker on the main board starting at 12:10:12 p.m. that day.
A circuit breaker is a mechanism that halts all stock trading for 20 minutes if the KOSPI falls 8% or more from the previous close for at least one minute. Before trading resumes, orders are collected for 10 minutes, then trades are executed in a single-price auction. At the time of activation, the KOSPI was down 730.49 points (8.18%) from the previous session at 8,199.81.
Earlier, at 11:12:12 a.m., a sell-sidecar was triggered to suspend the effectiveness of program sell quotes for five minutes as KOSPI 200 futures fell more than 5% from the reference price. With both a sell-sidecar and a circuit breaker triggered in one day, investor sentiment appears to be deteriorating rapidly.
As of 12:34 p.m. that day on the main board, foreigners were net sellers of 3.0923 trillion won and institutions 732.1 billion won, leading the index decline. Among institutions, pension funds were net sellers of 150 billion won. Individuals, by contrast, were net buyers of 3.7654 trillion won.
Foreign investors have continued net selling on the KOSPI for six consecutive sessions through that day. From on the 19th to the 25th over five sessions, net selling reached 15.6822 trillion won.
Overnight on Wall Street, Micron reported results that beat market expectations, but Apple fell more than 6% after noting plans to raise product prices due to higher memory prices. As concerns grew that rising memory prices could pressure major tech corporations' profitability, investor sentiment toward tech broadly weakened, and analysts said the impact extended to Asian semiconductor stocks.
Tech weakness was notable in Japan's stock market as well. SoftBank Group fell more than 10% intraday amid concerns about rising expense for artificial intelligence (AI) infrastructure investment and the possibility of an OpenAI initial public offering (IPO) delay. Major semiconductor-related stocks such as Advantest, a semiconductor test equipment maker, and Tokyo Electron also moved lower together.
Kim Dae-jun of Korea Investment & Securities Co. said, "SoftBank's plunge on an OpenAI initial public offering (IPO) delay appears to be the biggest factor weighing on investor sentiment."
Circuit breakers operate in three stages. Stage 1 is triggered when the index falls 8% or more from the previous day for at least one minute, halting all stock transactions for 20 minutes. If the decline widens to 15% or more, Stage 2 is triggered; at 20% or more, Stage 3 is triggered. In Stage 3, all stock transactions end for the day. There has been no case in Korea's stock market of a circuit breaker at Stage 2 or above.