Key facts
- The KOSPI index has entered a bear market, falling over 25% from its peak.
- The Korea Exchange activated a buy-side sidecar for the KOSPI due to a sharp rise.
- Program trading for KOSPI-listed shares was suspended for five minutes.
- The KOSPI rose 6.57% to 7,307.51 after opening 3.3% higher.
- The rally was influenced by overnight gains in U.S. semiconductor stocks and softer U.S. CPI data.
South Korea's benchmark Korea Composite Stock Price Index (KOSPI) has entered a bear market, shedding over 25% from its record high. Despite this decline, the index remains the world's best-performing major equity market year-to-date, largely driven by AI-fueled gains in semiconductor giants like Samsung Electronics and SK Hynix.
On Wednesday, the Korea Exchange (KRX) activated a buy-side sidecar for the KOSPI as the index experienced a sharp rise. Program trading for KOSPI-listed shares was suspended for five minutes starting at 9:06 a.m. The KOSPI opened 3.3 percent higher and subsequently rose 450.68 points, or 6.57 percent, to 7,307.51 as of 9:12 a.m.
This surge followed a strong overnight close in U.S. stocks, which were boosted by a rebound in semiconductor shares and a softer-than-expected consumer price index. The KOSPI's volatility has been notable, with SK Hynix shares experiencing significant swings, including a 14% drop on Monday. Retail investors, often utilizing margin debt, are now a primary force in the market, while foreign investors have withdrawn a record amount from South Korean equities this year.