Korea Exchange halted trading twice as Kospi and Kosdaq futures rocketed. SK Hynix +12%
The rally reflected a strong risk-on tone that carried over from Wall Street, with softer US inflation data driving broad gains in US technology shares overnight that Seoul then amplified. The scale of the move, large enough to trigger sidecar halts on both the Kospi 200 and Kosdaq 150 futures, pointed to unusually concentrated buying pressure in program trading flows. SK Hynix’s outsized gain underlined how closely Korean chipmakers were tracking the US tech rally, given the stock’s heavy weighting in both benchmark indexes. The dual sidecar activation was a signal that volatility controls came under real strain rather than routine triggering.
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Seoul stocks surged as softer US inflation data sparked a tech-led rally.
Summary:
- The Kospi rose 6.9% as of 0023 GMT on Wednesday
- The Korea Exchange activated a sidecar on the Kospi after Kospi 200 futures rose 5%, halting program trading for five minutes
- The Korea Exchange also activated a sidecar on the Kosdaq after Kosdaq 150 futures rose 6%, halting program trading for five minutes
- SK Hynix shares jumped more than 11.8% in morning trade in Seoul
- The SK Hynix rally tracked overnight gains in US technology stocks, which followed softer-than-expected US inflation data
South Korea’s Kospi surged 6.9% on Wednesday as Seoul stocks rallied sharply in a session that triggered volatility controls on both of the country’s main indexes. The Korea Exchange activated a sidecar on the Kospi after Kospi 200 futures rose 5%, halting program trading for five minutes, and separately activated a sidecar on the Kosdaq after Kosdaq 150 futures rose 6%, also halting program trading for five minutes.
The rally was driven by a broad risk-on move that followed softer-than-expected US inflation data, which had fuelled overnight gains across US technology stocks. SK Hynix shares jumped more than 11.8% in morning trade in Seoul, tracking that overnight strength in the US tech sector. Given SK Hynix’s substantial weighting in both the Kospi and Kosdaq indexes, its rally contributed significantly to the broader market’s advance.
The activation of sidecars on both benchmark futures contracts within the same session pointed to an unusually forceful move in program trading activity, with the exchange’s automatic circuit breakers triggered as futures gains outpaced the thresholds required to pause algorithmic trading temporarily. The scale of the advance, and the fact that it hit both the large-cap Kospi and the more tech-heavy Kosdaq simultaneously, reflected how closely Korean equities remained tied to sentiment in US markets, particularly for semiconductor-linked names.
This article was written by Eamonn Sheridan at investinglive.com.