Black Monday for the 4th Week... "Mondays Are Scary"

Stock Market Plunges Over 3% Every Monday This Month
KOSPI Drops Sharply by 3.36% Intraday Today

[Asia Economy Reporter Oh Ju-yeon] As the novel coronavirus infection (COVID-19) spreads, the domestic stock market has been experiencing repeated 'Black Mondays' with a drop of more than 3% every Monday this month. On the 30th, the market fell more than 3% during the session, and if it closes like this, it will be the fourth consecutive week. Among investors, there are even remarks such as "Mondays are scary."

According to the Korea Exchange, as of 9:39 a.m. that day, the KOSPI was at 1659.95, plunging 3.36% compared to the previous trading day. This was due to major U.S. stock markets falling more than 3% and international oil prices dropping further, raising concerns about economic contraction. Economic indicators to be announced one after another this week also increased anxiety.

Last week, the KOSPI sharply rose from the closing price of 1482.46 on the 23rd to 1717.73 on the 27th, spreading optimism about the stock market to the extent that a 'V-shaped rebound theory' emerged. However, on this day, the 1700 level was broken again, pouring cold water on such sentiment.

The KOSPI fell to the 1650 level that day and then reduced the decline, but as of 10:20 a.m., it was still down 2.77% from the previous trading day at 1670.23, unable to escape the downward trend. Until last week, the buying momentum of individual investors, known as the 'Donghak Ant Movement,' was expected to eventually pay off, but this turned into a 'second buying opportunity.'

If the KOSPI closes with a decline of over 3% that day, it will mark four consecutive weeks of Black Mondays. Since February 24, when the number of domestic COVID-19 confirmed cases surged and began spreading globally, the KOSPI has faced six Mondays, and except for March 2, all experienced crashes. Starting at 2114.04 on February 24, the KOSPI closed at 2079.04, down 3.87% from the previous trading day. On Monday, March 9, it plunged 4.19%, falling from 1981.02 to 1954.77. Subsequently, it sharply dropped 3.19% on the 16th and 5.34% on the 23rd, with the index falling to 1714.86 and 1482.46, respectively.

Counting the number of Mondays since February when the market simply closed lower, out of nine Mondays, eight were down days. On February 3, the KOSPI closed at -0.01%, on the 10th at -0.49%, and on the 17th at -0.06%, showing a downward trend every Monday throughout February.

The outlook for the stock market is not very bright.

Kim Young-hwan, a researcher at KB Securities, said, "Since 1945, during seven recessions and stock market corrections, without exception, the stock market bottomed after confirming negative growth in Gross Domestic Product (GDP)." He added, "The U.S. GDP is expected to contract in the second quarter this year, and if this follows past cases, the stock market correction is more likely to end in the second quarter rather than the first quarter." He forecasted, "While the possibility of falling below the previous low is low, it will not be easy to have a trend rise without a second correction in a situation where the real economy shock from COVID-19 has not yet fully materialized."

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