The Kospi has posted its steepest monthly decline on record this month, plunging more than 33% and surpassing the monthly loss suffered during the 1997 Asian financial crisis. The Kosdaq has also slid below levels seen during the Dec. 3, 2024, emergency martial law crisis, with sidecars and circuit breakers triggered in both markets in rapid succession.
As of 2:11 p.m. Wednesday, the Kospi had fallen to 5,511.25, a drop of 33.63% since the start of the month, according to Korea Exchange. The index shed 2,792.16 points from its July 1 closing level of 8,303.41.
The decline exceeds the 27.24% monthly loss recorded during the Asian financial crisis in October 1997, making it the largest monthly percentage drop in the index's history.
The Kospi market's total market capitalization shrank from 6,785.43 trillion won ($4.63 trillion) to 4,537.81 trillion won this month, wiping out 2,247.62 trillion won in less than a month.
The Kospi opened Wednesday up 65.45 points, or 1.09%, at 6,089.11, but quickly surrendered its early gains. The index then broke through the 6,000, 5,900, 5,800, 5,700 and 5,600 levels in succession.
A sell-side sidecar was triggered in the Kospi market at 10:55:07 a.m., followed by a circuit breaker at 12:32:32 p.m.
A circuit breaker activates when the index falls more than 8% below the previous session's closing level for at least one minute, halting all spot-market trading for 20 minutes.
The Kosdaq fell below the 660 level during intraday trading Wednesday, dropping beneath levels seen during the Dec. 3, 2024, emergency martial law crisis.
As of 2:10 p.m., the Kosdaq stood at 650.07, down 55.78 points, or 7.90%, from the previous session.
That is 27.08 points below the Dec. 4, 2024, closing level of 677.15 — the day after emergency martial law was declared. The Kosdaq had fallen just 1.98% that day, but later slid to 635.98 on Dec. 9 after the National Assembly's first impeachment motion against the president failed to pass.
The Kosdaq opened Wednesday up 7.86 points, or 1.11%, at 713.71 before reversing course and accelerating its losses.
Individual investors drove the decline in the Kosdaq, posting net selling of 359 billion won in what analysts described as panic selling. Foreign and institutional investors were net buyers of 308 billion won and 50.6 billion won, respectively.
A sell-side sidecar was triggered in the Kosdaq market at 10:56:07 a.m. after Kosdaq 150 futures prices plunged, suspending program sell orders for five minutes. A circuit breaker followed at 12:19:12 p.m. as the Kosdaq's losses deepened.
moon@heraldcorp.com
