Volatile Stock Market... This Time KOSPI Soars 5% and KOSDAQ 6% on Easing US-China Tensions
[Asia Economy Reporter Oh Ju-yeon] The domestic stock market, which had plummeted the previous day due to renewed concerns over the novel coronavirus infection (COVID-19) and North Korean provocations, surged sharply on the 16th amid easing US-China tensions.
On that day, the KOSPI closed up 5.28% at 2138.05 compared to the previous trading day. After opening at 2091.09, the KOSPI further increased its gains. At 10:52 a.m., the Korea Exchange also triggered a buy-side sidecar.
The buy-side sidecar in the securities market is activated when the KOSPI200 futures price rises more than 5% above the reference price, which is the previous day's closing price, and sustains that level for one minute.
The exchange explained, "The KOSPI200 futures rose from the previous closing price (reference price) of 265.00 points to 278.40 points, an increase of 13.40 points (5.05%), and sustained this for one minute, triggering the sidecar."
This year, the sidecar has been triggered a total of seven times, with this being the third time for a buy-side sidecar.
Among the top market capitalization stocks, all within the top 15, including Samsung Electronics (4.01%), SK Hynix (3.90%), Samsung Biologics (1.24%), and NAVER (4.75%), closed higher.
The KOSDAQ index closed at 735.38, up 6.09% from the previous trading day. At 11:02:54 a.m., a sharp rise in KOSDAQ150 spot and futures prices led to the activation of a buy-side sidecar in the KOSDAQ market, suspending program buy orders.
This was the sixth time the sidecar was triggered in the KOSDAQ market this year, with this being the third buy-side sidecar activation.
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Lee Kyung-min, a researcher at Daishin Securities, analyzed, "Positive news such as the Federal Reserve's implementation of a $600 billion MSLP (Main Street Lending Program), a $250 billion corporate bond purchase to alleviate corporate credit risk, and the partial easing of US Commerce Department sanctions on Huawei, which reduced concerns over US-China conflicts, led to the sharp rise in the stock market."
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