KOSPI plunges 8% on surging oil prices, triggering circuit breaker

According to The Financial News, the domestic stock market is sharply lower as international oil prices surge amid growing geopolitical uncertainty originating from the Middle East.
At 10:40 a.m. on the 9th, the KOSPI was trading at 5,132.07, down 452.80 points (8.11%) from the previous session. The index opened at 5,265.37, a drop of 319.50 points (5.72%), and then extended its losses.
At around 9:06 a.m., a sidecar was triggered, temporarily halting program sell orders for five minutes due to volatility in the KOSPI 200 Index Futures.
Then, at about 10:31 a.m., a circuit breaker was activated after the KOSPI remained more than 8% below the previous closing level for one minute. When a circuit breaker is triggered, trading in all stocks listed on the KOSPI is suspended for 20 minutes.
In the KOSPI Market, individual investors alone are net buying 2.9854 trillion won worth of shares. Foreign investors and institutions are net selling 1.8056 trillion won and 1.2349 trillion won, respectively.
Most large-cap stocks by market capitalization are in decline. In particular, Samsung Electronics (-10.04%), SK hynix (-11.58%), Hyundai Motor (-10.40%), LG Energy Solution (-6.49%), and Samsung Biologics (-4.32%) are all weak.
All industry sectors are under pressure, with securities (-10.12%), electrical and electronics (-10.11%), medical and precision instruments (-9.65%), and electricity and gas (-8.80%) posting the steepest losses.
Stock market volatility has increased as international oil prices have jumped on the back of the escalating crisis in the Middle East. The Strait of Hormuz, a key route for global crude shipments, is currently blocked, and on the 8th (local time) the Islamic Republic of Iran selected Mojtaba Khamenei, the son of the late Ayatollah Seyyed Ali Hosseini Khamenei, as the next Supreme Leader of Iran, raising concerns that the situation could drag on.
Eun Taek Lee, a researcher at KB Securities, noted, "With Mojtaba Khamenei chosen as the new Supreme Leader of Iran, international oil prices are also surging," and added, "In past cases where the stock market plunged as it is now, a 'V-shaped rebound' was rare, and most often we saw a 'W-shaped bottom.' This is because it takes time and a process of pricing in fear until uncertainty is resolved."
Lee Seong-hoon, a researcher at Kiwoom Securities, stated, "Given that the Korean economy is highly dependent on energy imports from the Middle East, a spike in oil prices amid the blockade of the Strait of Hormuz can heighten risk-off sentiment toward the domestic stock market," but added, "However, it should be noted that Korea has been taking measures to secure stable crude supplies in preparation for such geopolitical crises."
At the same time, KOSDAQ was trading at 1,076.12, down 78.55 points (6.80%) from the previous session. The index opened at 1,096.48, a decline of 58.19 points (5.04%) from the prior close.
As intraday losses deepened, a sell-side sidecar was triggered on KOSDAQ at around 10:31 a.m., suspending the effectiveness of program sell orders for five minutes.

yimsh0214@fnnews.com Lee Seong-hoon Reporter