[Numbers in the News] "Run Away" Individual Investors Flee Stock Market... KOSDAQ Drops Below 620 for the First Time Since the Pandemic

The KOSDAQ index, which has a high proportion of individual investors, fell to the 620 level, marking its lowest point in 4 years and 8 months. This means the KOSDAQ index has returned to the level of April 2020, during the COVID-19 pandemic period.

Due to prolonged instability caused by the impeachment crisis, on the 9th, both the KOSPI and KOSDAQ indices in the domestic stock market fell sharply, hitting their lowest points of the year, while the won-dollar exchange rate rose to the 1,430 won level. Employees are working in the dealing room at the Euljiro Hana Bank headquarters in Seoul. Photo by Heo Young-han

According to the Korea Exchange on the 9th, the KOSDAQ index started at 649.35, down 11.98 points (1.81%) from the previous trading day, and closed at 627.01 (-5.19%). This is the first time since April 2020 that the KOSDAQ index has fallen below the 630 level.

The KOSDAQ market is known for its high volatility and risk, but it attracts a high participation rate from individual investors due to the potential for high returns. However, following political turmoil such as President Yoon Seok-yeol’s declaration of martial law and the failure of the impeachment motion against him, it is interpreted that individual investors, who had been supporting the KOSDAQ market, have largely withdrawn from the domestic market.

On this day in the KOSDAQ market, foreigners and institutions bought stocks worth 205.3 billion KRW and 100.2 billion KRW respectively, but individuals sold stocks worth 301.4 billion KRW.

In the KOSDAQ market, individuals have shown a net selling trend for five consecutive trading days up to this day. From the 2nd, they have net sold 440.3 billion KRW over four trading days.

The KOSPI also plunged to a yearly low. The KOSPI closed at 2,360.58, down 67.58 points (2.78%) from the previous trading day. This is the lowest level in 1 year and 1 month since November 3 last year (2,351.83).

In the KOSPI market as well, it was individuals who pulled the index down. Foreigners showed a net buying of 102.8 billion KRW as a bottom-fishing move, but individuals sold massively, net selling 889 billion KRW.

In the Seoul foreign exchange market, the won-dollar exchange rate closed higher at 1,437.0 won, up 17.8 won from the previous trading day’s weekly closing price (3:30 PM). This is the highest level since October 2022.

The won-dollar exchange rate surged to 1,442 won on the 3rd, when President Yoon declared martial law, then fluctuated around the 1,410 won level. However, as the impeachment motion was proposed and failed, and political turmoil is expected to continue for some time, the exchange rate is showing renewed volatility. Some analysts predict that if political uncertainty persists, the won-dollar exchange rate could rise to 1,500 won by May next year.

Nomura Securities recently stated in a report, "We expect the won to show relative weakness in the second quarter of next year," and recommended "a dollar/ won long position (buying dollars) targeting a 1,500 won exchange rate by the end of May next year."

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