KOSPI and KOSDAQ Hit New Lows Again with "Basement Under the Floor"... Market Cap Evaporates by 64 Trillion Won in One Day

[Image source=Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] The KOSPI and KOSDAQ indices hit new yearly lows again on the 22nd. Due to a massive sell-off by foreign investors, the combined market capitalization of the KOSPI and KOSDAQ markets evaporated by more than 64 trillion won in just one day.

On this day, the KOSPI closed at 2,342.81, down 2.74% (66.12 points) from the previous trading day. This is the lowest level in 1 year and 7 months since November 2, 2020, when it was 2,300.16, marking a new yearly low.

The KOSPI, which had recovered above the 2,400 mark after rising for the first time in three days the previous day, lost the 2,400 level again in just one day.

The KOSPI index opened at 2,417.11, up 0.34% (8.18 points) from the previous close, buoyed by the rise in the three major U.S. stock indices the day before, but soon turned downward and sharply widened its losses.

In the securities market, simultaneous selling by foreigners and institutions pulled the index down. Foreigners sold stocks worth 320.6 billion won, and institutions sold 83.9 billion won worth of stocks. On the other hand, individual investors alone net bought stocks worth 375.5 billion won, absorbing the flood of sell orders in the market.

The weakening of the Korean won acted as a negative factor, triggering a large volume of foreign selling. The won-dollar exchange rate closed at 1,297.3 won, up 3.7 won from the previous day, threatening the 1,300 won level.

Based on the closing price, it marked a new yearly high for the third consecutive trading day following 1,292.4 won on the 20th and 1,293.6 won on the 21st, reaching the highest level in about 13 years since July 14, 2009 (high price basis 1,303.0 won).

Lee Kyung-min, a researcher at Daishin Securities, analyzed, "Rather than the emergence of any special issue, investor sentiment was dampened due to the continued weight of existing uncertainties such as tightening and inflation concerns and recession debates."

Kim Dae-jun, a researcher at Korea Investment & Securities, also said, "The macro environment is unfavorable to the stock market due to economic slowdown and monetary tightening, and both earnings and supply-demand are unfavorable. Downward pressure is expected to continue for the time being."

All of the top 10 stocks by market capitalization fell simultaneously. In particular, the "national stock" Samsung Electronics closed down 1.54% at 57,600 won, the lowest closing price since November 2, 2020 (57,400 won). Following were LG Energy Solution (-2.91%), SK Hynix (-3.15%), Samsung Biologics (-0.49%), Samsung Electronics Preferred (-0.56%), LG Chem (-2.64%), NAVER (-4.38%), Samsung SDI (-6.12%), Hyundai Motor (-0.58%), and Kia (-1.16%), all of which plunged sharply.

By industry, all sectors recorded declines. Construction (-4.97%), medical precision (-4.37%), non-metallic minerals (-4.27%), chemicals (-4.21%), textiles and apparel (-4.02%), machinery (-3.74%), services (-3.35%), and securities (-3.33%) showed downward trends in that order.

The KOSDAQ index closed at 746.96, plunging 4.03% (31.34 points) from the previous day. This is the lowest level since the closing price of 742.55 on July 2, 2020, about two years ago, marking a new yearly low.

By investor type, foreigners and institutions net sold stocks worth 61.5 billion won and 60.1 billion won respectively, while individuals net bought stocks worth 125.8 billion won.

By industry, all sectors except food and beverages (0.85%) showed declines. These included entertainment and culture (-6.15%), telecommunications equipment (-6.12%), semiconductors (-5.92%), digital content (-5.74%), non-metallic minerals (-5.62%), and software (-5.49%).

All of the top 10 KOSDAQ stocks by market capitalization also recorded declines. These included EcoPro BM (-0.19%), Celltrion Healthcare (-0.65%), L&F (-1.79%), Kakao Games (-9.14%), HLB (-2.25%), Pearl Abyss (-4.43%), Celltrion Pharm (-1.75%), Alteogen (-2.31%), Chunbo (-4.27%), and Wemade (-3.99%).

The daily trading volume was about 8.5895 trillion won in the securities market and 7.9454 trillion won in the KOSDAQ market.

The combined market capitalization of the KOSPI and KOSDAQ fell from 2,240.6459 trillion won the previous day to 2,176.1654 trillion won on this day, a decrease of 64.4805 trillion won in just one day.

Investor sentiment was extremely subdued, with 871 stocks declining in the securities market on this day. In contrast, only 42 stocks rose, and 20 stocks closed flat.

In the KOSDAQ market, 1,364 stocks declined. Only 105 stocks rose, and 16 stocks closed flat.

Seo Sang-young, head of the Media Content Division at Mirae Asset Securities, analyzed, "Today, our stock market fell due to extremely subdued investor sentiment, foreign selling, and the inflow of negative factors."

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