KOSPI Rebounds, Negative Factors Are 'Ongoing'... Anxious Donghak Ants

On the 7th, when the KOSPI index started higher, dealers were working in the dealing room of Hana Bank in Euljiro, Seoul. On that day, the KOSPI opened at 2,936.87, up 28.56 points (0.98%) from the previous trading day, and continued to extend its gains. Photo by Moon Honam munonam@

[Asia Economy Reporter Ji Yeon-jin] The negative factors that dragged the KOSPI below 3000 are still 'ongoing,' keeping anxiety high.

According to the Korea Exchange, foreign investors have continued a four-day streak of net selling in the KOSPI market from the 1st through the morning of this day. The KOSPI fell to 2900 the previous day and opened at 2940 today. However, even individual investors, who had been defending the index decline this month, began selling from the early trading hours today.

Recently, the stock market has rapidly declined as the US debt ceiling negotiations have faced difficulties, uncertainties in monetary policy, and risks such as China’s Evergrande Group and power shortages have fueled the dollar’s strength. In particular, it is analyzed that the slowdown in corporate earnings growth rates next year triggered the sharp drop. With the Chinese stock market closed for the National Day holiday, there is also speculation that foreign investors might be hedging by selling domestic stocks instead of Chinese stocks.

There is also analysis that concerns over a possible additional 25 basis point rate hike at the Bank of Korea’s Monetary Policy Committee meeting on the 12th acted as a 'trigger' for the stock market adjustment. Measures implemented by financial authorities to slow the pace of household debt growth have tightened liquidity in the stock market. Financial Services Commission Chairman Ko Seung-beom emphasized at the National Assembly audit the day before that "loans for real demand should also be managed reasonably within the borrower’s repayment capacity," highlighting that real demand loans must be made within repayment limits.

However, the easing of some external negative factors that had suppressed the stock market is expected to prevent further declines in the KOSPI. The US government debt negotiation issue has shown signs of resolution, natural gas prices that sparked inflation concerns fell 9% the previous day, and international oil prices also dropped 1.9% in New York futures markets. The won-dollar exchange rate, which hit a yearly high the previous day, fell 0.18% to 1190.1 won per dollar today. The investment strategy team at Hanwha Investment & Securities advised, "Once volatility in the stock market expands, it takes time to subside. It is advisable to wait for the market to stabilize rather than betting on further declines and emptying stocks now."

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