'Black Friday' KOSPI's Largest Drop in 4 Years... Institutions and Foreigners Sell 1.6 Trillion Won

Largest Daily Decline Since August 2020
Samsung Electronics Records Largest Daily Drop in Over 4 Years
Domestic Stock Market Hit Hard by US-Originated Shock

The KOSPI index recorded its worst daily decline in 1,443 days. The closing price also fell below the 2,700 level for the first time in about two months. It was hit hard by concerns of a US-origin recession and a sharp drop in the New York stock market.

[Image source=Yonhap News]

On the 2nd, the KOSPI closed at 2,676.19, down 101.49 points (3.65%) from the previous session. Starting at 2,719.39, down 58.29 points (2.10%) from the previous day's close, the KOSPI failed to recover its early losses and fell below the 2,700 level in the morning session. Selling pressure intensified in the afternoon, pushing it down to the 2,670 level.

This is the first time since June 5 (closing price 2,689.50) that the KOSPI has closed below the 2,700 level. It also recorded the largest daily decline since August 20, 2020, when it fell 3.66%. By investor type, foreigners sold a net 844 billion KRW, and institutions sold a net 779.6 billion KRW, totaling 1.6236 trillion KRW. Meanwhile, individuals bought a net 1.6197 trillion KRW.

By sector, all sectors except telecommunications (0.53%) declined. In particular, machinery (-5.42%), electrical and electronics (-4.77%), securities (-4.43%), manufacturing (-3.97%), and finance (-3.94%) recorded larger declines than the index.

Sixty stocks closed higher, 871 stocks closed lower, and 5 stocks were unchanged. Among the top 10 stocks by market capitalization, all except LG Energy Solution (0.75%) closed lower. The market leader Samsung Electronics closed at 79,600 KRW, down 4.21%, breaking the '80,000 KRW electronics' level. Samsung Electronics recorded its largest decline in 1,509 days since June 15, 2020, when it fell 4.91%. SK Hynix (-10.40%), Hyundai Motor (-3.75%), Kia (-4.46%), and KB Financial (-5.76%) also faced strong selling pressure.

The US stock market fell more than 1% across the three major indices the previous day amid growing recession concerns. Unemployment claims surged to the highest level in the past year, and the Institute for Supply Management (ISM) June Services Purchasing Managers' Index (PMI) recorded its lowest level since November last year.

KB Securities researchers Kim Dong-won, Kim Min-gyu, and Ha In-hwan identified four reasons for the decline: ▲ recession concerns ▲ Nvidia's sharp drop ▲ unwinding of yen carry trades ▲ renewed focus on the Middle East conflict. They said, "Most of the stocks with large declines were those that had risen significantly this year, but many stocks with poor performance this year also experienced large drops," adding, "We maintain a preference for financial and consumer stocks, where valuations can move, as earnings have already improved."

The KOSDAQ index closed at 779.33, down 4.20% (34.20 points) from the previous day. This is the lowest level in 263 days since November 13, 2023, when it closed at 774.42, and the largest decline since September 26, 2022, when it fell 5.07%.

By investor type, foreigners sold 150.6 billion KRW, institutions sold 89.9 billion KRW, and individuals bought a net 244.5 billion KRW.

146 stocks closed higher, 1,476 stocks closed lower, and 35 stocks were unchanged. Among the top market cap stocks, only KOSDAQ leader EcoPro BM (0.43%) closed higher; the rest closed lower. Notably, Enchem (-4.51%), Celltrion Pharm (-8.91%), Ligand Bio (-5.22%), Hugel (-4.46%), Lino Industrial (-6.00%), and Classys (-5.92%) showed significant weakness.

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