KOSPI Drops Below 6,700, Sell-Side Circuit Breaker Activated

South Korea's main stock market index, the KOSPI, plunged below the 6,700-point mark on October 24, prompting the activation of a sell-side circuit breaker. The Korea Exchange announced the suspension of program sell orders at 11:23 AM, a measure designed to curb volatility by halting program trading for five minutes. This intervention occurred after the KOSPI 200 futures contract fell more than 5% for a sustained period of one minute.

The KOSPI index began the trading day sharply lower, opening at 7000.78, down 96.11 points or 1.35%. The decline accelerated after the opening, and by 11:35 AM, the index was trading at 6753.92, a drop of 4.83%. The market's sharp fall is seen as a direct consequence of escalating geopolitical tensions between the United States and Iran, which have driven up international oil prices. This, coupled with a weak performance on Wall Street overnight, contributed to the bearish sentiment.

Major U.S. stock indices all closed lower. Notably, Alphabet's stock saw a nearly 7% decline, driven by investor concerns over its free cash flow turning negative despite strong earnings. Tesla shares also experienced a significant drop, falling over 14%. Locally, South Korean tech giants Samsung Electronics and SK Hynix were leading the decline on the KOSPI, both registering losses of over 6%. Individual investors were net buyers, while foreign and institutional investors were net sellers.

The KOSDAQ index also suffered, trading down 4.28% at 756.42 by 11:35 AM, reflecting the broad market weakness.

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The KOSPI sell-side circuit breaker was activated at 11:23 AM on the KOSPI market.