[Weekly Market Review] KOSPI Retreats Below 1800 Amid Ongoing Concerns Over COVID-19 Economic Impact

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[Asia Economy Reporter Eunmo Koo] The KOSPI closed the week below the 1900 mark again amid concerns that the economic shock from the novel coronavirus infection (COVID-19) could persist.

According to the Korea Exchange on the 25th, the KOSPI recorded 1,889.01 points this week, down 25.52 points (1.33%) from the previous week. After rebounding last week to reach the 1900 level, the KOSPI started the week on Monday the 20th with a decline due to economic uncertainty caused by COVID-19. Although there was initial upward movement driven by expectations for COVID-19 treatment development and the reopening of the U.S. economy, profit-taking emerged amid concerns over preemptive pricing and worsening economic indicators.

On the 21st, the index fell further as international oil price instability and geopolitical risks came to the forefront. The sharp drop in international oil prices due to the May futures expiration and concerns over weak demand caused by COVID-19 weighed heavily. Additionally, investor sentiment deteriorated rapidly following reports of North Korean State Affairs Commission Chairman Kim Jong-un’s critical condition after surgery, leading to a decline in the index. However, the government’s denial of Chairman Kim’s critical condition helped recover some of the losses.

On the 22nd, the index rose on expectations for economic stimulus measures. Despite starting lower due to ongoing international oil price instability, investor sentiment improved following announcements of the government’s third supplementary budget plan, a 10 trillion won measure to address employment shocks, and the establishment of a 40 trillion won fund to stabilize key industries. On Thursday the 23rd, the index continued to rise, supported by a rebound in international oil prices. Geopolitical risks between the U.S. and Iran eased, calming the sharp decline in oil prices, and institutional buying led by pension funds pushed the index upward.

Although the KOSPI maintained an upward trend for two days, on Friday the 24th, concerns over delays in the resumption of economic activities due to controversies surrounding COVID-19 treatment clinical trials worsened investor sentiment, causing the index to close the week at 1,889.01, down 25.72 points (1.34%) from the previous trading day.

This week in the securities market, foreign and institutional investors sold net amounts of 1.3995 trillion won and 1.3078 trillion won, respectively. In contrast, individual investors bought a net amount of 2.6007 trillion won.

The KOSDAQ market also ended lower at 632.96 points, down 1.83 points (0.28%) from the previous week. During this period, similar to the securities market, foreign and institutional investors sold net amounts of 249.6 billion won and 170.5 billion won, respectively, while individual investors bought a net amount of 482.8 billion won.

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