[Weekly Market Review] KOSPI Falls Below 2200 Amid COVID-19 Spread... "Growth Rate Downgrade Inevitable"

On the 21st, as the possibility of community spread of the novel coronavirus (COVID-19) increased, the KOSPI index opened lower at 2,165.65, down 29.85 points (1.36%) from the previous trading day. The won-dollar exchange rate started the session at 1,205.7 won, up 7.0 won. Dealers are working at the Hana Bank dealing room in Euljiro, Seoul on this day. Photo by Moon Honam munonam@

[Asia Economy Reporter Minji Lee] In the third week of February, the domestic stock market widened its decline amid growing concerns over the spread of the novel coronavirus disease (COVID-19). The rapid increase in confirmed COVID-19 cases appears to have dampened investor sentiment toward risk assets.

According to the Korea Exchange on the 22nd, the KOSPI closed at 2,162.84, down 80.75 points (3.5%) from the previous week. Although the KOSPI had rebounded with about a 2% rise over the prior week, it closed lower on four out of five trading days this week.

During this period, Samsung Electronics fell 7%, from a closing price of 61,800 KRW on the 14th to 59,200 KRW on the 21st. SK Hynix also declined from 104,500 KRW to 103,000 KRW.

The KOSDAQ index dropped 3%, from a closing price of 688.91 on the 14th to 667.99. Among the top market cap stocks, Celltrion Healthcare fell 1.3%, from 65,200 KRW to 64,300 KRW. HL Biotech also declined 6.6%, from 102,000 KRW to 93,500 KRW.

In the KOSDAQ stock market, shares related to hand sanitizers, masks, and diagnostic kits surged due to the impact of COVID-19. Seegene's stock price jumped about 16% on the day following the announcement of the start of supply of COVID-19 diagnostic reagents. Researcher Kim Choong-hyun of Mirae Asset Daewoo said, “In the COVID-19 crisis, rapid diagnosis and patient isolation are more critical than treatment development,” adding, “In the case of Bioneer, during the H1N1 flu outbreak, its sales in Q4 2009 rose 535% year-on-year to 13.2 billion KRW.”

Securities experts predict that the safe-haven asset rally may continue, considering the spread of COVID-19 deaths in South Korea and the East Asian region.

Researcher Lim Dong-min of Kyobo Securities explained, “As COVID-19 deaths increase, money is flowing into gold and Singapore REITs,” adding, “The sharp drop in China's manufacturing PMI in February and the expansion of economic indicators suggest that the East Asian region is entering a phase of economic contraction influenced by COVID-19.” In fact, total exports from February 1 to 20 amounted to 26.3 billion USD, a 12.4% increase year-on-year, but considering that the number of customs clearance days increased by three days compared to the previous year, the average daily export value decreased by 9.3% year-on-year.

In the financial market, there are forecasts that growth may remain in the 1% range this year. An So-eun, a researcher at IBK Investment & Securities, said, “It is difficult to gauge the magnitude of downside risks to the domestic and international economy,” adding, “The private sector, exports, and facility investments are highly dependent on China, so the slowdown in demand and supply from China inevitably has a negative impact on the growth rate.”

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