Korean stock markets recorded 66 sidecar activations as of May 24, surpassing the 2008 global financial crisis annual record, according to Korea Exchange data. The KOSPI triggered sidecars 41 times (20 buy-side, 21 sell-side) while KOSDAQ activated 25 times (14 buy-side, 11 sell-side), driven by sharp swings in foreign investor flows and semiconductor stocks. The 2008 crisis saw 45 total activations across both markets. Analysts attribute the volatility to concentrated foreign selling in Samsung Electronics and SK Hynix amid Middle East tensions, rising international oil prices, and U.S. market rate pressures. The sidecar mechanism temporarily halts program trading orders for five minutes when KOSPI 200 futures move 5% or more, or KOSDAQ 150 futures move one minute.
Sidecar Activations Surpass 2008 Crisis Record With 66 Triggers
Korea Exchange reported 66 sidecar activations across both markets as of May 24, exceeding the 2008 annual total of 45. The KOSPI market saw 41 activations (20 buy-side, 21 sell-side) compared to 26 in 2008, while KOSDAQ recorded 25 activations (14 buy-side, 11 sell-side) versus 19 in 2008. The sidecar system suspends program trading orders for five minutes when KOSPI 200 futures move 5% or more from the reference price for one minute, or when KOSDAQ 150 futures move 6% or more in the same direction as the KOSDAQ 150 index moving 3% or more for one minute. The mechanism does not halt overall stock trading, only program trading buy or sell orders temporarily.
Bidirectional Volatility Shows Buy and Sell Sidecars Equally Split
The 66 activations divided almost evenly between buy-side (34 times) and sell-side (32 times), indicating repeated sharp reversals rather than a sustained directional trend. Over the five trading days ending May 24, sell-side sidecars triggered on May 20 in both markets, buy-side sidecars activated on May 21 and May 22 in KOSPI, buy-side triggered on May 23 in KOSDAQ, then sell-side sidecars returned on May 24 in both markets. This pattern reflects consecutive days of declines, rebounds, and renewed declines.
Korean Stocks Fall Over 5% on May 24 With Foreign Outflows
On May 24, the KOSPI closed at 6690.62, down 5.72% from the previous session, falling below the 7000 level. The KOSDAQ finished at 748.22, down 5.32%. Sell-side sidecars activated at 11:23 AM in the KOSPI market and at 11:47 AM in KOSDAQ. Foreign investors sold a net 3.2828 trillion won in the KOSPI market while institutional investors sold 1.9513 trillion won. Individual investors bought 5.1783 trillion won but could not prevent the index decline. Samsung Electronics fell 7.59% and SK Hynix dropped 8.34%, amplifying the KOSPI's decline.
SK Hynix Q2 Earnings on May 29 Seen as Key Catalyst
SK Hynix is scheduled to announce its second-quarter earnings on May 29. Market participants will focus on operating profit figures, high-bandwidth memory (HBM) demand, memory prices, and second-half shipment plans. SK Hynix previously identified HBM-centered memory market growth, pricing and supply expansion, and geopolitical uncertainties as key variables for the year. Daishin Securities researcher Lee Kyung-min stated that risk asset sentiment retreated as Middle East tensions escalated, with sidecars activating for five consecutive trading days across both markets.
FAQ
What caused Korean stocks to record 66 sidecar activations as of May 24?
Sharp volatility from foreign investor outflows and concentrated swings in Samsung Electronics and SK Hynix triggered 66 sidecar activations across KOSPI (41 times) and KOSDAQ (25 times) as of May 24, surpassing the 2008 crisis total of 45.
How did Korean stocks perform on May 24?
The KOSPI fell 5.72% to 6690.62 and KOSDAQ declined 5.32% to 748.22 on May 24, with foreign investors selling 3.2828 trillion won and Samsung Electronics dropping 7.59% while SK Hynix fell 8.34%.
When will SK Hynix announce its second-quarter earnings?
SK Hynix is scheduled to release its second-quarter earnings on May 29, with market focus on HBM demand, memory prices, and second-half shipment guidance.
