Kospi circuit breaker triggered as index falls below 7,000

A circuit breaker was triggered on the Kospi on Monday afternoon after the index plunged more than 8 percent, sliding below 7,000 points for the first time in two months. 

Korea Exchange issued the circuit breaker at 1:28 p.m., halting trading on the benchmark index for 20 minutes. It was the seventh circuit breaker triggered on the Kospi this year. 

A circuit breaker temporarily suspends trading in stocks and related derivatives to cushion the market from severe shocks during sharp declines. It is activated when the index falls at least 8 percent from the previous day's close and remains at that level for one minute. 

At the time of the circuit breaker's issuance, the Kospi stood at 6,871.2, down 8.08 percent from the previous session.

This marks the first time in roughly two months that the Kospi has fallen below the 7,000 mark since it first broke through the milestone on May 6.

The sell-side trading curb was activated on the Kospi earlier, at 10:34 a.m., marking the 18th sell-side sidecar issued this year. 

A sell-side curb is triggered for the Kospi when the Kospi 200 futures price falls by 5 percent or more from the reference price and remains at that level for at least one minute. Once activated, it suspends trading of program sell orders for five minutes.

Korea's two semiconductor heavyweights are dragging the index with sharp declines. As of noon, SK hynix had fallen 12.39 percent from the previous trading day, dropping below the 2-million-won ($1,327) mark, while Samsung Electronics slid 7.72 percent to fall into the 260,000-won range.

BY LEE JIAN [[email protected]]