On the 28th, KOSDAQ plunged more than 8% intraday, triggering a circuit breaker. Shortly after the open, both KOSPI and KOSDAQ saw sell-sidecars triggered, and then circuit breakers hit both markets, showing extreme volatility.
Korea Exchange (KRX) said it activated a circuit breaker on the KOSDAQ market at 12:01:12 p.m. The KOSDAQ circuit breaker is the first in about two months since June 8 and the third this year.
At the time of activation, the KOSDAQ index was at 702.91, down 61.95 points (8.09%) from the previous trading day. The KOSDAQ market circuit breaker is triggered when the index remains down 8% or more from the previous close for one minute, and cash market trading is halted for 20 minutes.
As of 12:34 p.m., the KOSDAQ index was down 61.83 points (8.08%) from the previous trading day at 703.03, slipping to just above the 700 level.
The market plunge is seen as the result of overlapping negatives surrounding the semiconductor sector.
Concerns over intensifying global memory competition grew after news that China has moved to develop deep ultraviolet (DUV) lithography equipment needed for chip manufacturing and that Chinese DRAM maker Changxin Memory surged more than 500% from its IPO price on its first day of trading.
In addition, news that Nvidia would provide payment guarantees of up to $250 billion for OpenAI's long-term data center lease also dampened investor sentiment. The market noted that a structure in which Nvidia funds a client and the client uses the funds to buy Nvidia products again has heightened concerns about the AI investment cycle.
In the KOSDAQ market, semiconductor equipment and materials stocks showed sharp declines. As of 12:34 p.m., Wonik IPS(240810) was down 14.91%, PSK 13.97%, and Jusung Engineering 12.41%.
Earlier at 10:13 a.m., a circuit breaker was also triggered on the KOSPI market, halting trading for 20 minutes. As of 12:34 p.m., KOSPI was down 668.33 points (9.89%) from the previous trading day at 6,087.42.
Samsung Electronics(005930) and SK hynix were each down in the 10% range, while semiconductor-related stocks such as Samsung Electro-Mechanics and SK Square were plunging around 15%.
Less than 15 minutes after the open, sell-sidecars—temporary suspensions of the effectiveness of program sell quotes—were successively triggered on the KOSPI and KOSDAQ markets.