Concerns about recession due to the tariff policy of the Donald Trump U.S. administration are rising, leading to a panic sell in the market.
As of 9:02 a.m. on the 7th, the KOSPI index stood at 2357.28, down 108.14 points (4.39%) from the previous transaction day. The KOSDAQ index also fell by 21.97 points (3.2%) to 665.42 at the same time.
Stock prices of all top market cap companies in the KOSPI market, including Samsung Electronics, SK hynix, LG Energy Solution, Samsung Biologics, Hyundai Motor, and Celltrion, plummeted. In the KOSDAQ market, all top market cap companies, including Alteogen, ECOPRO BM, HLB, Ecopro, and Rainbow Robotics, are also weak.
The market is sharing the requirements for circuit breakers and sidecars. Circuit breakers are a system that suspends transactions in three stages when the KOSPI and KOSDAQ indices drop sharply compared to the previous transaction day. In the case of a circuit breaker Level 1, trading is suspended for 20 minutes and then resumed if the KOSPI or KOSDAQ index falls by more than 8% compared to the previous transaction day for 1 minute.
The sidecar is a system that restricts the effectiveness of program trading bids for 5 minutes if the futures trading item based on KOSPI 200, which is traded in the domestic index futures market, falls by more than 5% for the stock with the highest trading volume on the previous transaction day.
Fears of tariffs originating from the New York Stock Exchange in the U.S. are spreading worldwide. Following the announcement by President Trump of universal and reciprocal tariffs on the 2nd (local time), the Standard and Poor's 500 index dropped by more than 10% in just two trading days. The S&P 500 futures are also experiencing a drop of around 4% on the same day.
This is because the Trump administration's likelihood of withdrawing its tariff policy in the short term has diminished. President Trump wrote on his social media, "Hang in there with patience," and U.S. Secretary of Commerce Howard Lutnick also noted in an interview with the media that there will be no delay in the imposition of tariffs.
Seo Sang-young, a researcher at Mirae Asset Securities, said, "Hedge funds are selling most of their assets to control margin calls due to the sharp drop in the stock market, and the imposition of tariffs and retaliatory tariffs by the Trump administration is negatively impacting corporate profits, so increased volatility is expected to continue."