KOSPI, KOSDAQ Trigger Sidecars in Tandem… KOSDAQ Collapses Below 750 Line for First Time in 13 Months

The sell-side sidecar mechanism, activated by the exchange to prevent a temporary explosion of sell orders, was triggered for the second consecutive day. The KOSPI closed at 2,516.27, down 4.46% from the previous session, while the KOSDAQ plummeted 5.33% to finish at 749.64. According to Korea Exchange, the KOSPI started lower at 2,643.58, briefly recovered some losses to reach 2,814.86 in the morning, but was pushed down to an intraday low of 2,472.80 in the afternoon as selling pressure intensified.

In the KOSPI market, individual and foreign investors were net buyers of 351 billion won and 523.6 billion won respectively, while institutions were net sellers of 921.8 billion won. Samsung Electronics closed down 4.31% at 244,000 won, and SK Hynix closed at 1.764 million won.

KOSDAQ trading volume shrank to the 4 trillion won range, marking the lowest level since August of last year. On this day, foreigners and institutions were net sellers of 57.7 billion won and 134.8 billion won respectively in the KOSDAQ, while individuals were net buyers of 190.8 billion won. Analysts assessed that the KOSDAQ is facing the worst marginalization since its inception, as the drop in trading volume overlaps with a liquidity shift towards large-cap KOSPI stocks.

Investor sentiment was dampened as overseas adverse factors accumulated over the Constitution Day holiday were unleashed all at once. Following the release of Chinese AI startup DeepSeek's latest model, concerns spread regarding a slowdown in AI infrastructure investment and semiconductor demand. Instability in the Middle East pushed international oil prices above $90 per barrel, weighing on the stock market.

The securities industry diagnosed the current downward trend as excessive overselling. Kim Byung-yeon, a researcher at NH Investment & Securities, analyzed that it is difficult for the KOSPI to fall below the 2,600 mark even considering the bad news reflected in the market. Kim Du-eon, a researcher at Hana Securities, assessed that the sharp decline is closer to a price correction caused by excessive crowding and leverage liquidation rather than an end to the semiconductor cycle. The securities industry analyzed the earnings announcements of US Big Tech companies and AI-related data center investment plans as key market variables.