KOSPI Falls About 2%... Back to 3000 Level After 4 Months

KOSDAQ Falls Below 1000... Lowest Closing Price in 2 Months
Investor Sentiment Plummets Amid US Tapering Concerns

On the afternoon of the 19th, dealers are working in the dealing room at the Hana Bank headquarters in Jung-gu, Seoul.
[Photo by Yonhap News]

[Asia Economy Reporter Minwoo Lee] The KOSPI plunged nearly 2%, dropping back to the 3000 level for the first time in four months. The KOSDAQ also closed at the 991 mark for the first time since early June. This appears to be due to an overall decline in investor sentiment following the U.S. Federal Reserve's (Fed) indication of tapering (reduction of asset purchases).

On the 19th, the KOSPI closed at 3097.83, down 1.93% (61.10 points) from the previous day. After a slightly weak start, it briefly rose to the 3158 level in the morning but soon reversed downward. The decline widened until just before the market close, making the closing price the lowest of the day. The last time the KOSPI closed in the 3000 range was on April 1 (3087.40), over four months ago.

Analysts say that overall investor sentiment weakened following the Fed's tapering signal. On the 18th (local time), the Fed released the minutes of the Federal Open Market Committee (FOMC) meeting, hinting at the implementation of tapering this year. It is expected that the schedule for tapering will be announced either at the Jackson Hole Conference starting on the 26th or at the FOMC meeting on the 22nd of next month. Accordingly, the three major U.S. indices?the Dow Jones Industrial Average, S&P 500, and Nasdaq?also fell by around 1% each on the New York Stock Exchange (NYSE) that day.

Park Gwangnam, head of the Digital Research Team at Mirae Asset Securities, explained, "The Fed's indication of tapering through the release of the July FOMC minutes seems to have acted as a burden. Since the U.S. stock market also fell by about 1%, the Korean stock market was affected as well."

On the KOSPI market that day, foreign investors sold a net 325.4 billion won. This marked the eighth consecutive trading day of net selling by foreign investors, totaling 8.0327 trillion won sold. This is the longest consecutive net selling streak since the nine trading days of net selling from May 11 to 24. At that time, the total net selling amount was 8.2887 trillion won.

However, the scale of net selling has somewhat decreased. While there were trillion-won-level sales on the 11th (1.6134 trillion won), 12th (1.8823 trillion won), and 13th (2.6926 trillion won), the amounts have generally declined since the 17th (420.9 billion won) and 18th (259.4 billion won).

Institutions also sold 416 billion won worth of stocks that day. After net buying 410 billion won the previous day, they released more sell orders in just one day. Meanwhile, individuals bought a net 802 billion won worth of stocks.

Almost all sectors declined. The machinery sector saw the largest drop at -5.09%. Several sectors also fell more than 4%, including construction (-4.45%), transportation and warehousing (-4.44%), and steel and metals (-4.40%). Only the banking sector rose, gaining 7.02%.

Among the top 10 market capitalization stocks, most declined. Hyundai Motor experienced the largest drop at -2.82%, followed by Samsung SDI (-2.14%), Samsung Biologics (-1.81%), SK Hynix (-1.44%), Celltrion (-1.09%), Samsung Electronics (-1.08%), NAVER (-1.05%), and LG Chem (-0.22%). In contrast, KakaoBank stood out with an 8.88% increase. Kakao also closed up 0.69%.

The KOSDAQ's decline was even steeper. It closed at 991.15, down 2.93% (29.93 points) from the previous day. The KOSDAQ falling to the 991 level is the first time since June 11. Similar to the KOSPI market, it started slightly weak, briefly rebounded, and then widened its losses. Around 1 p.m., it even fell below the 1000 mark.

Foreign and institutional investors also sold simultaneously. They sold 154.2 billion won and 102.1 billion won worth of stocks, respectively. This is the first time since July 26 that foreign investors have net sold over 150 billion won.

All sectors closed lower. Broadcasting services (-5.25%), telecommunications broadcasting services (-5.20%), and telecommunications services (-5.07%) all fell more than 5%. Several other sectors also declined more than 4%, including internet (-4.73%), non-metallic (-4.65%), other manufacturing (-4.22%), and telecommunications equipment (-4.21%).

Among the top 10 market capitalization stocks, only Pearl Abyss (7.66%), L&F (1.23%), and EcoPro BM (0.16%) rose. All other stocks, including SK Materials (-5.66%), CJ ENM (-4.61%), Celltrion Pharm (-3.41%), Celltrion Healthcare (-2.89%), Kakao Games (-2.19%), HLB (-1.67%), and Seegene (-1.06%), fell by more than 1%.

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