KOSPI Falls to 2430, 'New Annual Low Again' · KOSDAQ Breaks 800... '5-Man Jeon Crisis'

[Image source=Yonhap News]

[Asia Economy Reporter Lee Seon-ae] On the 15th, the KOSPI, which started lower, widened its losses in the afternoon. The KOSPI broke below the 2430 level, hitting a new yearly low. The KOSDAQ also fell below 800, dropping into the 700 range. Heightened caution ahead of the June Federal Open Market Committee (FOMC) meeting is weighing on the indices. The May Consumer Price Index (CPI) significantly exceeded expectations, rapidly raising forecasts that the Federal Reserve (Fed) will implement a larger-than-expected interest rate hike, a giant step (0.75 percentage point increase). The sharp net selling by foreign investors is also increasing downward pressure on the indices.

As of 1:46 PM, the KOSPI was trading down 1.66% at 2,451.47. Around 1:28 PM, it dropped to 2,436.81, setting a new intraday yearly low. The previous yearly low was 2,457.39 from the previous day. The KOSDAQ recorded a 2.53% decline at 802.78. The KOSDAQ also showed a weak trend, briefly falling below 800 during the session before barely recovering above that level.

Foreign and institutional investors are offloading shares, pulling the indices down. Although individual investors are buying at lower prices, it is insufficient to support the decline. Foreign investors are net selling 367 billion KRW and 188.1 billion KRW in the KOSPI and KOSDAQ markets, respectively. Institutions are selling 69.4 billion KRW in the KOSPI market alone. Individuals are net buying 422 billion KRW and 176.7 billion KRW in the two markets, respectively.

Most of the top market capitalization stocks are plunging. Samsung Electronics, the barometer of the stock market, is now approaching the 50,000 KRW mark. It is trading down 2.26% at 60,500 KRW, having fallen to 60,200 KRW during the session. Naver and Kakao are down more than 3% and 5%, respectively. SK Hynix and KB Financial Group are also down over 1%.

Lee Woong-chan, a researcher at Hi Investment & Securities, said, "With the FOMC announcement tomorrow, interest rates continue to rise, causing foreign funds to exit," adding, "The FOMC event, which will be announced tomorrow, is so significant that the Chinese retail sales data did not have much impact." He further explained, "It is important to observe whether the Fed will demonstrate its determination to control inflation and interest rates."

In the market, the lower bound of the KOSPI is seen in the 2400 range, but some forecasts say that making any assumptions is meaningless. Kim Hak-gyun, head of the research center at Shin Young Securities, said, "Concerns about whether the Fed can control inflation are growing, affecting the stock market," and added, "Predicting the lower bound of the KOSPI itself is meaningless and futile in this market."

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