Stock Market Plunge Causes Even Untact Leading Stocks to Falter

Naver, Kakao, and NCSoft Untact Big 3 Slump... Drop Up to 7%

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[Asia Economy Reporter Minwoo Lee] As concerns over the resurgence of the novel coronavirus infection (COVID-19) cause the domestic stock market to plunge sharply, even the leading untact stocks such as Naver (NAVER), Kakao, and NCSoft are faltering.

According to the Korea Exchange on the 21st, Kakao closed at 364,500 KRW, down 3.19% from the previous day. This contrasts with the KOSPI, which had been on an upward trend this month but fell more than 2%, breaking below the 2400 level on the 18th, when Kakao had risen about 7% calmly. Naver, also considered a leading 'untact stock' along with Kakao, showed a similar pattern. It closed at 305,500 KRW, down 3% from the previous day, showing a different trend from its rise on the 18th.

While foreigners were major net sellers of Kakao, individual investors showed strong selling pressure on Naver. Foreigners sold about 100 billion KRW over two days for Kakao, with 82.3 billion KRW on the 19th and 18.8 billion KRW on the 20th. Meanwhile, individuals net sold 119.2 billion KRW on Naver during the same period.

Meanwhile, NCSoft, the leading stock in the gaming industry, also showed weakness. It dropped sharply by 6.90% to close at 783,000 KRW the previous day. This was the largest decline since the domestic stock market plunged to the 1400 level in March due to COVID-19. Compared to early last month when it recorded a new high of 997,000 KRW, nearing the 1 million KRW mark, it fell about 21.5%. The market capitalization, which had exceeded 21 trillion KRW at that time, shrank to around 17.2 trillion KRW, pushing its ranking down from 10th to 15th.

However, since liquidity remains strong, there is an analysis that this market movement is only a temporary adjustment and a sharp drop like in March will not occur. Kakao, Naver, and NCSoft have all started to rebound. As of 9:50 a.m. that day, Kakao was up 0.55% from the previous day at 366,000 KRW, Naver rose 1.64% to 310,000 KRW, and NCSoft also increased 1.53% to 795,000 KRW compared to the previous close.

Researcher Yesin Lee of Shinhan Financial Investment said, "Although it is inevitable that recovery expectations for domestic demand and COVID-19-affected industries, which are late to participate in the economic normalization process, will retreat and investment sentiment will shrink, considering the global financial market environment and structural changes in industry trends, the stock market decline will be limited. Just as growth-leading stocks were effective during the previous COVID-19 impact and recovery process, it is necessary to continuously pay attention to them in the future."

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