Sell-side sidecar triggered as Kospi opens sharply lower on tech losses, Middle East tensions

Seoul shares opened sharply lower as investors took profits in technology stocks amid concerns over the ongoing conflict in the Middle East, triggering a sell-side sidecar. 

A sell-side curb, locally known as a sidecar, was activated on the Kospi at 9:10 a.m. to halt program trading for five minutes, according to the Korea Exchange. This marks the 19th sell-side curb issued this year.

A sidecar halts program trading when certain market indexes fluctuate beyond a designated threshold. A sell-side curb is triggered for the Kospi when the Kospi 200 futures price falls by 5 percent or more from the reference price and remains at that level for at least one minute. Once activated, it suspends trading of program sell orders for five minutes.

At the time of activation, the Kospi 200 futures index stood at 1,104.40, down 60.92 points, or 5.22 percent, from the previous session's close.

The Kospi fell 323.91 points, or 4.45 percent, to 6,960.50 at the opening bell.

The index spiked 6.24 percent on Wednesday as softer-than-expected U.S. inflation data eased concerns over near-term Federal Reserve rate hikes.

Overnight, the Dow Jones Industrial Average rose 0.29 percent to 52,658.64, while the tech-heavy Nasdaq composite declined 0.62 percent to 26,269.23.

Concerns over AI reemerged, sending major AI-related tech stocks on Wall Street lower overnight.

On Wednesday, the United States launched fresh strikes on Iran. The escalating conflict in the Middle East has revived concerns over energy supplies from the region.

BY LEE TAE-HEE, YONHAP [[email protected]]