KOSPI plunges 6%, triggers sell-off sidecar amid U.S. semiconductor stock decline

South Korea's stock market experienced a significant downturn on Thursday, with the KOSPI index plunging over 6% and triggering a "sell-off sidecar." This sharp decline was largely attributed to a negative trend in U.S. semiconductor stocks.

The KOSPI opened lower than the previous day and continued its downward trajectory. By 9:08 AM, a sell-off sidecar was activated, a measure that temporarily halts program sell orders for 5 minutes when the KOSPI 200 futures index drops sharply. Despite this, the KOSPI continued to fall, briefly dipping below 8100 points before trading at 8160.52, down 5.54%, as of 9:40 AM.

Major South Korean tech giants saw substantial losses. Samsung Electronics' stock fell by 6.26% to trade at 329,500 won, while SK Hynix experienced an even steeper decline of 9.08%, trading at 2,113,000 won.

The primary catalyst for the market's decline was the sharp drop in U.S. semiconductor stocks overnight. While the Dow Jones Industrial Average rose 1.73% and the S&P 500 gained 0.41%, the tech-heavy Nasdaq Composite Index saw a slight decrease of 0.09%. The decline was exacerbated by Broadcom, a semiconductor company, which fell 12.59% after reporting earnings that missed market expectations. Micron Technology also dropped 7.74%, contributing to a broader downturn in AI-related semiconductor stocks.