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Seoul stocks extend fall to trigger circuit break for 2nd day
  • By Lee Han-soo
  • Published 2020.03.13 11:55
  • Updated 2020.03.16 11:23
  • comments 0

Korea's stock markets extended its fall on Friday, triggering the market operators to halt trading temporarily for two consecutive days as investor sentiment plummeted.

Such a nosedive came after U.S. President Donald Trump's address on COVID-19 on Thursday failed to calm investors over concerns about the recession brought on by the virus outbreak.

Analysts here have claimed that the lack of clarity from President Trump’s address, which called for a travel ban from Europe except for the U.K. for 30 days but failed to provide a detailed economic rescue package, has caused further panic in the local market

The Korea Exchange (KRX) activated a sidecar, the Korean version of the circuit breaker as regulator’s tool to prevent stock market crashes, in the nation's secondary bourse, Kosdaq market, only four minutes after it opened at 9 a.m. as the market lost an additional 6.86 points, or 8.31 percent, to 516.63.

It was the first circuit breaker for the Kosdaq market since 9/11 in 2001.

As of 11 a.m., the tech-studded Kosdaq market extended its loss to fall further to 491.20 points, losing 72.29 points, or 12.83 percent.

The nation’s primary bourse also put a sidecar in motion at 9:06 a.m. Friday, after the companies with the highest trading volume on the previous day fell by more than 5 percent for a minute. The benchmark KOSPI shed 149.25 points, or 8.14 percent, to 1,685.08 as of 11 a.m. The KOSPI dipped by more than 8 percent to 1,684.56 points at one point.

The securities market sidecar is triggered when the stocks of companies listed on the KOSPI 200 futures market with the highest trading volume on the previous trading day rise or fall by more than 5 percent in one minute, and is automatically released after 5 minutes from the starting point.

Heavy hitters in the KOSPI market saw their stock price fall sharply, with market bellwether Samsung Electronics shedding 6.5 percent of its stock price to 47,500 won ($39) and SK Hynix Inc. also declined 7.13 percent to 76,900 won on Friday.

The nation's bourse operator activated a sidecar in the KOSPI market for five minutes on Thursday as well, which was the first time the sidecar was triggered since Oct. 4, 2011, when the KOSPI 200 futures market fell 13 points, or 5.06 percent, to 243.90 points.

The Korean currency was trading at 1,224.95 won against the U.S. dollar, down 18.45 won from the previous session's close.


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