KOSPI and KOSDAQ Both Fall Over 1% Amid Highest Exchange Rate in 13 Years... KOSDAQ Nears 60,000 Mark

[Image source=Yonhap News]

[Asia Economy Reporter Myunghwan Lee] The KOSPI dropped more than 1% in early trading on the 22nd, falling to the mid-2400 range. This is attributed to selling pressure mainly from foreign and institutional investors as the won-dollar exchange rate reached its highest level in over 13 years.

As of 9:20 a.m. that day, the KOSPI stood at 2461.41, down 1.25% (31.28 points) from the previous trading day. The KOSPI opened at 2467.38, down 1.02% (25.31 points), and the decline has slightly deepened since then.

By investor type, individuals were the only buyers with net purchases worth 84.3 billion won, while foreigners and institutions sold 4.8 billion won and 76.6 billion won respectively.

The domestic stock market decline is interpreted as a result of weakened investor sentiment among foreign and institutional investors due to the continued strong dollar. As of 9 a.m., the won-dollar exchange rate in the Seoul foreign exchange market was 1,335.5 won per dollar, up 9.6 won from the previous day's closing price. The exchange rate surpassing the 1,330 won level is the highest since April 29, 2009, when it reached 1,357.5 won, marking about 13 years and 4 months.

All of the top 10 stocks by market capitalization on the Korea Exchange are declining. Samsung Electronics traded at 60,000 won, down 1.48% (900 won) from the previous day, putting the "60,000 won Samsung Electronics" level at risk of collapse. Large portal-related stocks such as Kakao (-2.48%) and Naver (-2.22%) are also down more than 2%. Other stocks like SK Hynix (-1.87%), Samsung SDI (-1.62%), and Samsung Biologics (-1.38%) are also showing declines.

At the same time, the KOSDAQ index stood at 801.31, down 1.58% (12.86 points) from the previous day. The KOSDAQ opened at 806.90, down 0.89% (7.27 points), and the decline has sharply increased since then.

By investor type, individuals were the only buyers with net purchases worth 57.8 billion won, while foreigners and institutions sold 12.7 billion won and 38.2 billion won respectively.

Most of the top market capitalization stocks on the KOSDAQ are also declining. Cheonbo is trading at 238,200 won, down 2.18% (5,300 won) from the previous day, and Kakao Games is down 1.62% (900 won) at 54,500 won. Pearl Abyss (-1.56%) and Alteogen (-1.32%) are also declining. HLB is the only stock rising, up 0.32% (150 won) at 46,500 won.

On this day, the domestic stock market is expected to be negatively affected by foreign investor flows due to the high exchange rate, according to securities industry forecasts. Seokhwan Kim, a researcher at Mirae Asset Securities, said, "The correlation between the won-dollar exchange rate and the KOSPI has been -0.92 since 2021, showing a very strong inverse correlation," adding, "While the rising exchange rate is negative from the perspective of foreign investor flows, it is necessary to pay attention to sectors and companies that benefit greatly from the exchange rate increase."

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