KOSPI Plunges Over 6% in a Single Day Amid US Midterm Election Backlash

On the 6th, immediately after the results of the US midterm elections were announced, the KOSPI closed at 5,059.69, down 324.11 points (6.02%) from the previous trading day, plunging more than 6% in a single day. This demonstrates the significant impact of US political developments on the domestic stock market. On the day, a circuit breaker was triggered at 9:03 a.m. and a sell-side sidecar was activated at 9:34 a.m. on the stock market. Ultra-emergency measures were also deployed on the KOSDAQ, where a sell-side sidecar was triggered at 9:06 a.m.

Behind the sharp decline was the outcome of the US midterm elections, in which the Democratic Party won control of both the Senate and the House of Representatives. The previous day, the US Nasdaq index fell 5.52% and the Philadelphia Semiconductor Index dropped 12%, and these losses were directly reflected in the Korean market. The KOSDAQ closed at 644.27, down 34.14 points (5.03%) from the previous trading day. Foreign investors sold a net of nearly 2.8 trillion won worth of shares on the stock market.

In the Seoul foreign exchange market, the won-dollar exchange rate closed at 1,356.60 won, up 14.50 won from the previous session. The dollar-won rate rose as high as 1,362.20 won intraday, marking its highest closing level in a month since the 1st of last month, based on the Seoul market close.