Sidecar activated on Kospi after sell-off in Samsung Electronics, SK hynix pulls index lower

A temporary sell-side trading curb, known locally as a sidecar, was triggered on the Kospi on Tuesday morning, as a sell-off in Samsung Electronics and SK hynix pulled the index lower.

The Korea Exchange activated the curb at 10:23 a.m., after Kospi 200 futures fell 5.12 percent, or 66.26 points, to 1,227.32. By then, the index itself was down 4.7 percent, hitting around 7,600 points.

It is the 16th sell-side trading curb to be activated on the Kospi this year.  

A temporary sell-side trading curb kicks in when the most actively traded Kospi 200 futures contract moves at least 5 percent from the previous session’s close and remains there for a minute. The sidecar suspends program-driven buy and sell orders for five minutes, while ordinary stock trading continues.

As of July, the number of buy- and sell-side sidecars combined has already surpassed the previous annual record of 26, set during the 2008 global financial crisis.

The swings have accompanied a semiconductor-led surge that carried the Kospi past 8,000 points for the first time. More recently, fears that the AI boom behind the rally has peaked have fueled sharp reversals.

BY JUNG SI-NAE [[email protected]]