Due to an error in the CSI300 index, sudden fluctuations occurred... Korean ETFs also experienced slight 'turbulence'

Individual Stocks Fluctuate Only 2%, but Index Plunges 17%
6 Korean ETFs Also Affected...Normalization Begins in the Afternoon

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[Asia Economy Reporter Minwoo Lee] The Chinese CSI300 index plunged sharply in early trading due to a system error, causing the prices of domestic exchange-traded funds (ETFs) tracking the index to also fluctuate.

According to Bloomberg on the 20th, the CSI300 Healthcare Index dropped about 17% immediately after the market opened. However, this was an error. The 29 stocks included in this index only experienced fluctuations of around 2%.

As a result, the CSI300 index, composed of 300 blue-chip stocks listed on the Shanghai Stock Exchange and the Shenzhen Stock Exchange, also declined. It started at 3747.84, down 2.39% from the previous trading day, and at one point in the morning, the decline widened to 2.8%. It was only restored to normal in the afternoon.

In response, the Shanghai Stock Exchange issued a public apology to investors. The exchange explained, "There was a problem during the system upgrade process, which caused an error in index calculation," and added that normal operations were restored from 1 p.m.

Due to the error in the representative Chinese index, ETF prices worldwide that use the CSI300 as the underlying asset also fluctuated sharply in early trading. Bloomberg estimated that there are at least 20 ETFs tracking the CSI300 index. Most of these are listed on stock markets in China, Hong Kong, Taiwan, and Korea.

There are a total of six CSI300 index-tracking ETFs listed on the domestic stock market. These include ▲KODEX China Mainland CSI300 ▲Tiger China CSI300 ▲KINDEX China Mainland CSI300 ▲KINDEX China Mainland CSI300 Leverage (Synthetic) ▲Tiger China CSI300 Leverage (Synthetic) ▲Tiger China CSI300 Inverse (Synthetic).

KODEX China Mainland CSI300 recorded 10,050 KRW at around 10:30 a.m., when the Chinese stock market opened, down 2.38% (245 KRW) from the previous day. It then rebounded to 10,275 KRW, the previous day's closing price, by 1:50 p.m. The closing price was 10,260 KRW, down 0.34% from the previous day.

The 'Tiger China CSI300 Leverage (Synthetic)', which tracks twice the return, also fell by up to 2.65% in the morning. It recovered in the afternoon and closed at 18,195 KRW, down 0.71% from the previous day.

A Korea Exchange official stated, "Although products tracking the CSI300 index were affected, the volatility was not large," and added, "Since asset managers issued market guidance and supplied liquidity as a response, the exchange did not take any separate measures."

This content was produced with the assistance of AI translation services.