Sell-side sidecar triggered for first time in 11 trading sessions

Foreign, institutional investors sell in tandem, widening losses

US big-tech earnings shock drags SK hynix down 8%

The Kospi is displayed on a screen at the Hana Bank dealing room in Jung-gu, Seoul, on Friday. [Yonhap]
The Kospi is displayed on a screen at the Hana Bank dealing room in Jung-gu, Seoul, on Friday. [Yonhap]

The Kospi plunged more than 5% during trading Friday, falling below the 5,700 mark as simultaneous selling by foreign and institutional investors widened losses and triggered a sell-side sidecar on the main bourse.

As of 10:25 a.m., the Kospi stood at 5,633.34, down 304.32 points, or 5.13%, from the previous session. The index had opened 177.31 points, or 2.99%, lower at 5,760.35 before extending its losses.

Foreign investors and institutions posted net selling of 553.7 billion won ($415 million) and 240.9 billion won, respectively, dragging the index lower. Individual investors were the sole net buyers, picking up 709.3 billion won worth of shares.

The sharp decline triggered an intraday sell-side sidecar. According to Korea Exchange, program-trading sell orders on the main bourse were suspended for five minutes beginning at 10:04:55 a.m. It was the first activation of the Kospi sell-side sidecar in 11 trading sessions, since Oct. 15.

At the time of activation, the KOSPI 200 futures index stood at 887.92, down 47.92 points, or 5.12%, from the previous session's closing price.

Overnight on Wall Street, all three major indexes fell amid concerns over Alphabet's AI investment costs and cash flow. The Dow Jones Industrial Average closed down 132.54 points, or 0.25%, at 52,342.56.

The S&P 500 fell 23.59 points, or 0.30%, to 7,720.39, while the NASDAQ Composite dropped 365.13 points, or 1.38%, to 26,184.72.

Amazon and Intel, which reported earnings after the close, also fell in after-hours trading — Amazon by around 5% and Intel by more than 20%.

Growing wariness over the AI investment burden on US big-tech companies spread selling pressure to domestic semiconductor stocks. Samsung Electronics and SK hynix were each down roughly 5% and 8%, respectively.

Kim Seok-hwan, a researcher at Mirae Asset Securities, said Samsung Electronics shares were extending their decline following Thursday's earnings release, as disappointment over the shareholder return plan combined with weakness in US technology stocks.

Seo Sang-young, a managing director at Mirae Asset Securities, said a lower open for the Kospi had been expected given that the US semiconductor index fell 1.42% on concerns over Alphabet's deteriorating free cash flow and the return on AI investment, while Intel plunged in after-hours trading on weak guidance and Amazon also fell short of expectations.

Seo added that foreign investors' futures and spot trading during the session would be a key factor to watch, as semiconductor-driven share price volatility had recently been more heavily influenced by foreign investor flows and shifts in market sentiment than by corporate earnings.

At the same time, the Kosdaq was down 17.01 points, or 2.26%, at 736.22, extending losses after opening 15.47 points, or 2.05%, lower at 737.76.


moon@heraldcorp.com