KOSPI Falls as Low as 4,899 Intraday
Sell-Side "Sidecar" Triggered During Session
KOSDAQ Also Down More Than 4%
Driven by simultaneous selling from foreign investors and institutions, the KOSPI plunged sharply in early trading on February 6. The KOSDAQ is also weak, falling more than 4%. As the New York stock market overnight declined, led by large-cap tech stocks on concerns over overheating in artificial intelligence (AI) investments, global risk appetite has shrunk rapidly and the correction phase is continuing.
On the 6th, as the KOSPI plunged shortly after the market opened and a temporary suspension of program sell orders (sidecar) was triggered, an employee was working in the Hana Bank dealing room in Jung-gu, Seoul. Yonhap News
As of 9:30 a.m. on February 6, the KOSPI was trading at 4,953.67, down 209.9 points (4.07%) from the previous session. The index opened at 5,013.15, down 150.4 points (2.91%), and then extended its losses. At 9:23 a.m., it fell to as low as 4,899.30, even breaking below the 4,900 level. Foreign investors and institutions are net sellers of 570.2 billion won and 164.5 billion won, respectively, while individual investors are countering with net purchases of 738.5 billion won.
The Korea Exchange triggered a sell-side sidecar on the KOSPI market at 9:06 a.m. that day. A sell-side sidecar is a mechanism under which, if KOSPI 200 futures remain in a declining state for one minute, the effectiveness of program sell orders is suspended for five minutes.
By sector, all areas are in decline, including securities (-6.18%), transportation equipment and parts (-5.36%), metals (-5.23%), telecommunications (-5.13%), retail (-5.00%), machinery and equipment (-4.56%), manufacturing (-4.14%), medical precision instruments (-4.08%), and electrical and electronics (-4.04%).
Most of the top large-cap stocks by market capitalization are also weak. Samsung C&T (-8.01%), Hanwha Aerospace (-7.09%), SK Square (-6.84%), Hyundai Motor (-5.63%), Hyundai Mobis (-5.54%), and Hanwha Ocean (-5.16%) have all fallen sharply. HD Hyundai Heavy Industries (-4.91%), Samsung Life Insurance (-4.75%), SK Hynix (-4.28%), Doosan Enerbility (-4.08%), Samsung Electronics Preferred (-3.96%), Korea Electric Power Corporation (-3.72%), and Samsung Electronics (-3.58%) are also declining together. In contrast, KB Financial Group is showing strong gains of more than 3%, bucking the index downturn.
The KOSDAQ index is also weak. At the same time, the KOSDAQ was trading at 1,062.78, down 45.63 points (4.12%) from the previous session. The index opened at 1,077.08, down 31.33 points (2.83%), and then extended its losses.
Among the top KOSDAQ stocks by market capitalization, Rainbow Robotics (-8.30%), Peptron (-6.93%), Kolon TissueGene (-6.91%), and Mezzion Pharma (-6.65%) plunged. Ecopro BM (-5.48%), Robotis (-5.54%), LegoChem Biosciences (-5.11%), ABL Bio (-4.78%), Alteogen (-4.65%), and Voronoi (-4.12%) were also weak. In contrast, some stocks such as Pearl Abyss (4.37%), Wonik IPS (2.45%), and HPSP (0.89%) rose.
Meanwhile, on February 5 (local time) in the New York stock market, the Dow Jones Industrial Average, centered on blue-chip stocks, closed at 48,908.72, down 592.58 points (1.2%) from the previous session. The large-cap focused S&P 500 Index finished at 6,798.4, down 84.32 points (1.23%). The tech-heavy Nasdaq Composite closed at 22,540.586, down 363.993 points (1.59%).
Alphabet (Google's parent company) projected that it would increase its capital expenditures to as much as 185 billion dollars this year, after which its share price fell 0.54%. Microsoft (MS) plunged 4.95% as concerns over AI facility investments and weakness in its cloud services overlapped.
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