South Korea’s primary equity indices, KOSPI and KOSDAQ, registered steep losses on the opening day of February, with both gauges sharply lower by midday. The downturn has raised concerns among investors regarding shifts in U.S. monetary policy direction.
On February 2, the Korea Exchange reported the KOSPI began the session at 5,122.62, falling 1.95% from its prior close. As the trading day progressed, the KOSPI’s decline accelerated, dropping as low as 4,933 points in the afternoon or 5.5%—slipping below the psychological 5,000-point threshold for the first time in five sessions.
Simultaneously, the KOSDAQ started trading at 1,128.57, down 1.82%. While the index briefly attempted to find a floor, broader market volatility saw it fluctuating as investors balanced retail inflows against institutional selling.
In response to mounting losses, the Korea Exchange implemented a sell-side circuit breaker at 12:31 p.m. This mechanism is triggered on the KOSPI when the most heavily traded KOSPI 200 futures contract records a price swing exceeding 5% from the previous day within a single minute.
The sell-off particularly affected leading blue chips. Market heavyweight Samsung Electronics was observed trading 4.74% lower at 152,900 won around midday, while SK Hynix posted a 6.71% drop to 848,000 won during the same period.
Market participants cited mounting expectations for a slower path to U.S. interest rate cuts after the nomination of Kevin Warsh, previously a member of the Federal Reserve Board and known for his hawkish stance, to chair the U.S. central bank.
