Falling KOSPI 'New Yearly Low, Retreats to 2130'... Simultaneous Selling by Individuals and Foreigners

[Image source=Yonhap News]

[Asia Economy Reporter Lee Seon-ae] Due to the sharp decline in the U.S. stock market, the KOSPI hit a new yearly low during trading on the 30th. It fell to the 2130 level, showing an extremely deteriorated investor sentiment.

As of 9:40 a.m. that day, the KOSPI stood at 2146.86, down 24.07 points (1.11%) from the previous trading day. The index opened at 2161.11, down 9.82 points (0.45%), fluctuated around the 2160 level in the early session, then widened its losses to fall below the 2150 level, dropping below the yearly low of 2151.60 recorded on the 28th. By 9:51 a.m., it had fallen further to 2137.02, marking the largest drop.

In the KOSPI market, individual investors sold a net 186.3 billion KRW and foreigners sold a net 30.6 billion KRW, increasing the index's decline. Institutions alone bought a net 212.2 billion KRW, defending against further falls.

On the 29th (local time) at the New York Stock Exchange, the Dow Jones Industrial Average, which tracks blue-chip stocks, closed at 29,225.61, down 1.54% from the previous day. The large-cap focused Standard & Poor’s (S&P) 500 index dropped 2.11% to 3,640.47, marking a yearly low. The tech-heavy Nasdaq index plunged 2.84% to close at 10,737.51. Additionally, the small- and mid-cap Russell 2000 index fell 2.35% to 1,674.93. The sharp declines in shares of Apple, the largest market cap company, and electric vehicle maker Tesla led the index drops. The stronger-than-expected employment data also influenced expectations that the Federal Reserve’s monetary tightening policy would continue unabated.

Seosangyoung, a researcher at Mirae Asset Securities, forecasted, "The Korean stock market is expected to proceed with a stock-specific market amid a roughly 1% decline at the start, as rebound buying sentiment and recession concerns collide." He noted that despite the U.S. stock market’s dollar weakness, the recession issue was highlighted through negative news from some individual companies, which would negatively impact the Korean market. Particularly, the Philadelphia Semiconductor Index’s 3.2% drop due to the slowdown in the PC industry is a burden.

Han Ji-young, a researcher at Kiwoom Securities, pointed out, "Although there are upward factors such as exchange rate decline, U.S. interest rate drops, and anticipation of bad news being priced in advance, the market started lower due to existing downward factors like the Fed’s tightening-driven U.S. stock market plunge and domestic individual investors’ margin call sell-offs. The poor after-hours stock performance of major U.S. semiconductor and consumer goods companies will also constrain investment sentiment in related domestic stocks."

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