KOSPI Plummets Over 8%, Circuit Breaker Activated Amid Sharp Sell-off

South Korea's main stock market index, the KOSPI, experienced a dramatic plunge on Tuesday, falling by over 8% and prompting the activation of a circuit breaker. The Korea Exchange announced a temporary halt to all stock trading on the KOSPI market at 10:13:43 AM due to the severe sell-off.

The circuit breaker mechanism is designed to suspend trading for 20 minutes when the KOSPI index falls 8% or more from its previous day's closing price and maintains that level for at least one minute. This measure aims to prevent panic selling and allow investors time to reassess the market.

Earlier, at 9:06:02 AM, a "selling sidecar" was implemented for the KOSPI market. This system temporarily halts program trading for five minutes to curb excessive price fluctuations. The KOSPI opened lower, continuing a downward trend from the previous day, and its decline accelerated throughout the morning.

The sharp fall in the KOSPI is largely attributed to a significant overnight decline in U.S. semiconductor stocks. Major South Korean tech giants were heavily impacted, with Samsung Electronics down over 9% and SK Hynix falling more than 11%. The secondary KOSDAQ market also saw a substantial drop, falling over 6% and triggering its own selling sidecar earlier in the morning.