Kospi opens sharply lower on U.S. tech losses, triggers sell-side sidecar

Stocks opened sharply lower Thursday as a sell-off of U.S. semiconductor shares weighed on market sentiment, with a sell-side side car activated on the Kospi.

After opening 4.46 percent lower, the Kospi extended losses, plunging 517.25 points, or 6.23 percent, to 7,790.16, as of 9:15 a.m.

Amid the sharp drop, Korea Exchange activated the sell-side curb at 9:07 a.m. A sidecar halts program trading for five minutes when certain market indexes fluctuate beyond a designated threshold.

A sell-side stoppage for the Kospi is triggered when the Kospi 200 Futures index falls 5 percent or more for at least one minute.

At the time of the sidecar activation, the Kospi 200 Futures index was trading at 1,255.94 points, down 80.92 points, or 6.05 percent, from the previous close.

U.S. stocks retreated overnight. The S&P 500 slipped 0.2 percent, while the tech-heavy Nasdaq 100 fell 1.5 percent. The Philadelphia Semiconductor Index, a key gauge of chip stocks, tumbled 6.3 percent.

Fed Chair Warsh said inflation expectations and inflation risks have eased in recent weeks, dampening hopes for a July interest rate cut.

Investors also remained cautious about the latest developments in U.S.-Iran talks after the two sides concluded another round of indirect negotiations on Wednesday, with no clear signs of progress toward lasting peace.

Market heavyweights were down across the board.

Samsung Electronics tumbled 7.47 percent, and SK hynix plunged 7.73 percent.

AI investment firm SK Square sank 10.23 percent, and automaker Hyundai Motor shed 5.33 percent.

The won strengthened by 0.6 won from the previous session to trade at 1,554.3 per dollar at 9:15 a.m. 

BY LEE TAE-HEE, YONHAP [[email protected]]