Sidecar

• The KOSPI index plummeted over 5% early on July 16, eventually closing down 6.4% following a period of extreme volatility. • The sharp decline was triggered by a significant sell-off in U.S. semiconductor stocks on July 15, which sparked a "sell sidecar" mechanism in the Korean market. • This crash highlights the high sensitivity of the South Korean market to global tech trends and the volatility of the semiconductor sector.

• The KOSPI index climbed back above 7,300 and the KOSDAQ index surpassed 820, marking a significant recovery for both markets. • Intense buying momentum immediately following the market open triggered buy-side sidecar measures, which temporarily suspended program trading to curb volatility. • This surge indicates a strong return of investor confidence and aggressive purchasing activity in the South Korean equity markets.

• On July 8, 2027, a sell-side sidecar was triggered on the KOSDAQ index, following a similar trigger on the KOSPI. • The event occurred amidst volatile market conditions, as evidenced by activity at the Hana Bank headquarters in Seoul. • These triggers are designed to temporarily halt trading to prevent extreme market volatility and panic selling.

• The Kospi has triggered 31 sidecars so far in 2026, surpassing the previous historical record set in 2008. • Extreme market volatility is being driven by heavy trading in semiconductor stocks, specifically Samsung Electronics and SK hynix, as well as leveraged ETFs. • This surge in speculative trading has amplified instability within South Korea's stock market, prompting concerns over systemic risk.

• The South Korean stock market is experiencing an unprecedented "bipolar" trend in 2026, marking it as the most volatile year in history. • Market instability is highlighted by the KOSPI surpassing volatility levels seen during the global financial crisis, with the "sidecar" trading halt triggered 29 times. • Researcher Hyojin Kim of Shin Young Securities notes that such extreme two-way volatility typically signals a major crisis or the bursting of a market bubble.