Kospi trading halted after circuit breaker follows sell-side sidecar

A circuit breaker was triggered on the Kospi on Tuesday after the index plunged more than 8 percent, following the earlier activation of a sell-side sidecar.

Korea Exchange issued the circuit breaker at 1:51 p.m., halting trading on the benchmark index for 20 minutes. It was the sixth circuit breaker triggered on the Kospi this year and the 12th on record.

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, the Kospi stood at 7,401.56, down 649.77 points, or 8.07 percent, from the previous session.

The index opened at 7,919.20, down 132.13 points, or 1.64 percent, from the previous close. It extended its losses throughout the session before the decline accelerated in afternoon trading. At one point, it fell as low as 7,392.04, marking an intraday decline of 8.19 percent.

A sell-side sidecar was triggered at 10:23 a.m., temporarily suspending program sell orders for five minutes.

The sell-side curb is triggered when the Kospi 200 futures index falls at least 5 percent from the previous session's close and remains at that level for one minute. At the time of activation, the Kospi 200 futures index stood at 1,227.32, down 66.26 points, or 5.12 percent, from the previous session's close.

BY JEONG HYE-JEONG [[email protected]]