Circuit breaker in South Korea: When global markets last halted trading

markets

• South Korea activates circuit breaker amid stock market plunge
• KOSPI fell 8.05 percent, KOSDAQ dropped 6.46 percent
• Trading halted for 20 minutes amid Middle East conflict concerns

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South Korea’s stock exchange triggered a circuit breaker on Monday after sharp losses in equities amid rising concerns over the Middle East conflict and surging global oil prices.

The halt was activated by the Korea Exchange following a bout of panic selling. The benchmark KOSPI tumbled 449.38 points, or 8.05 percent, to 5,135.49 , while the KOSDAQ declined 74.58 points, or 6.46 percent, to 1,080.09.

The circuit breaker resulted in a 20-minute halt in trading and marked the second such halt in South Korea within four trading sessions. The move came amid growing worries about the prolonged Middle East conflict and the surge in global crude oil prices.

Meanwhile, Indian markets also signalled weakness, with the GIFT Nifty trading about 3.4 percent, or roughly 800 points, lower at 23,770.

Past instances of circuit breakers in global markets

Circuit breakers are temporary trading halts introduced by stock exchanges to curb panic selling during sharp market declines.

In the United States, circuit breakers were triggered four times within ten days during the COVID-19 Market Crash. Trading was halted on March 9, March 12, March 16 and March 18, 2020 as global markets plunged amid the pandemic-driven selloff.

India has also witnessed circuit breakers during periods of extreme volatility. On May 17, 2004, often referred to as “Black Monday”, markets crashed following election results, with the BSE Sensex plunging about 11 percent at the open and trading being halted twice during the session.

More recently, on March 13, 2020, Indian markets triggered a circuit breaker after the Sensex fell about 10 percent shortly after opening, resulting in a 45-minute halt in trading during the COVID-19 market panic. China also briefly triggered circuit breakers in 2016 during a period of intense market volatility.