New Delhi, Feb. 2 -- South Korean market regulators stepped in on Monday after a sharp early decline triggered a temporary halt on program-based sell orders. The action came after futures linked to the Kospi 200 dropped more than 5%, activating a market safety mechanism known as a "sidecar" for the first time since April.

The Kospi had fallen more than 5% in early trade as heavy algorithmic and arbitrage-driven selling intensified losses. Under exchange rules, authorities can suspend program sell orders when declines breach predefined thresholds. The objective is to prevent automated trading strategies from amplifying panic-driven moves and to allow markets time to stabilise.

Program trading includes index arbitrage and algorithmic stra...