KOSPI index fell to its lowest point in 2018 as it went below 2100 points.
South Korean stock market is crumbling endlessly due to unstable global environment. Just in this month, it is recording downward trend of more than 10%.
According to Korea Exchange (KRX), KOSPI index closed the 23rd with 2106.10, which is 55.61 points (2.57%) lower than the previous day.
On this day, KOSPI crashed since its opening as foreigners and institutional investors had gone on selling spree. KOSPI fell down to 2094.69 at one point and recorded the lowest point since the 10th of March of 2017 when it recorded 2082.31. It is also the lowest based on closing price. On this day, foreigners and institutional investors sold $370 million (421.5 billion KRW) and $213 million (242.8 billion KRW) respectively.
Due to various negative factors, KOSPI index went down by 10.11% just in this month. This is the biggest margin since KOSPI index went down by 11.86% in August of 2011.
Actually, this is the 5th time that KOSPI index went down by more than 1%. After it went down by 4.44% on the 11th, it went down by great margin three times on this day alone.
Major reason why South Korean stock market is struggling this month is due to continuous geopolitical instability. President Donald Trump hinted about breaking INF (Intermediate-Range Nuclear Forces) treaty which has increased potential for long-term conflict between the U.S. and China.
Downward trend of major bio companies from the fact that Temasek, which is a sovereign wealth fund in Singapore, may sell part of Celltrion’s shares that it owns through block deal is also another reason why South Korean stock market is struggling this month. On this day, stock prices of Celltrion and Samsung Biologics went down by 8.19% and 6.6% respectively. Besides these two, top 30 companies based on market capitalization also saw their stock prices go down on this day.
KOSDAQ closed the 23rd with 719 points, which is 3.38% lower than the previous day. Just like KOSPI, foreigners sold $102 million (116.1 billion KRW) through KOSDAQ.
Problem is that South Korean stock market is plunging more heavily compared to other stock markets.
New York Stock Exchange closed the 22nd (U.S time) in a mixed trend due to increase trend of Chinese stock market and poor performance of American companies. Dow and S&P500went down by 0.50% and 0.43% respectively. NASDAQ went up by 0.26%. Even though Chinese stock market went up by 7% in the past two days, KOSPI did not even go up by 1% during same period.
“Although Dow, S&P500, and NASDAQ finished the 22nd in a mixed trend, downward trend of rising nations is being exaggerated.” said Kim Byung-yeon who is an analyst for NH Investment & Securities. “Today’s decline was maximized due to trade war between the U.S. and China and global military tension.”
Staff Reporter Ryu, Geunil | ryuryu@etnews.com