[Weekly Market Review] KOSPI Shows Signs of Recovery from 'New Coronavirus Shock'

[Image source=Yonhap News]

[Asia Economy Reporter Park Jihwan] This week (February 3rd to February 7th), the domestic stock market can be summarized in one phrase: after a rapid recovery from the shock of the novel coronavirus infection (Wuhan pneumonia), the market showed signs of weakening toward the end.

According to the Korea Exchange on the 8th, the KOSPI closed at 2211.95, up 4.39% compared to the previous week. The KOSDAQ also rose 4.69% to 672.63 points.

In the case of KOSPI, institutional selling was prominent. Institutions sold 1.3891 trillion won this week. On the other hand, individuals and foreigners bought 457.6 billion won and 818.1 billion won respectively, leading the index's rise. Similarly, on the KOSDAQ, institutions sold 183.8 billion won, but individuals and foreigners bought 123.2 billion won and 83 billion won respectively.

The start of this week’s domestic stock market was not good. On the 3rd, the KOSPI closed lower for three consecutive days due to continued fears of the spread of the novel coronavirus following the previous week. After opening at 2086.61, down 1.53% from the previous session, the market fluctuated, even turning upward briefly during the day, but ultimately closed slightly lower.

From the next day, the KOSPI rebounded, rising on the back of buying by individuals and foreigners. The perception that the recent drop was excessive in a short period led to an influx of buying. The Chinese stock market, which had fallen by about 9% on Monday, also stabilized, greatly improving investor sentiment.

Additionally, positive U.S. economic data contributed to the KOSPI’s upward trend continuing until the 6th. January’s private sector employment increase exceeded market expectations at 291,000, and improved economic indicators such as U.S. service sector and private employment positively influenced the market. Furthermore, China’s announcement to reduce tariffs on $75 billion worth of U.S. products was also seen as a positive signal.

However, on the 7th, the KOSPI fell for the first time in four days, showing signs of a pause in the upward momentum. On that day, the KOSPI retreated 15.99 points (0.72%) to 2211.95, pulling back. Analysts attribute this to profit-taking selling after the index had surged more than 100 points over the previous three days following a sharp drop.

This content was produced with the assistance of AI translation services.