Sidecar Triggered as Kospi Plunges 6%
The Kospi fell as much as 6% intraday, dropping to around 7,458 points, while the Kosdaq slid roughly 3% to near 820 points. Both benchmarks closed near their intraday lows. Samsung Electronics and SK hynix each tumbled about 9%, dragging the broader index down.
On the flow side, foreign investors net sold about 2.7 trillion won on the Kospi, while institutions also sold a net 160 billion won. Pension funds within the institutional bucket, however, posted a marginal net buy of 9.6 billion won. The Kosdaq saw both foreign and institutional investors turn net buyers, a notable contrast. The won-dollar exchange rate hovered around 1,525 won.
As losses deepened, a sidecar circuit halt was triggered during the session. The Wall Street Journal warned that Korea's stock market could turn into a "Squid Game," citing the market's concentration in Samsung Electronics and SK hynix, leverage products, and foreign capital outflows. Advancing issues numbered only around 200 on the Kospi, vastly outnumbered by decliners.
Discussion also turned to second-half strategy. Analysts noted that many variables — the Fed's policy stance, upcoming big tech earnings, and confirmation of hyperscaler capital expenditure — remain unverified. In a high-volatility environment, keeping cash allocation in the 70:30 range was advised to allow flexible buying on dips and selling on rallies. A suggested portfolio split half of equity exposure toward AI/electronics names and half toward defensive sectors such as financials, shipbuilding, and defense.