As the U.S. and North Korea could not come to an agreement during second North Korea summit, South Korea’s stock markets took a major hit. There were stocks that fell by more than 20% with South Korea-North Korea economic cooperation stock with center.
KOSPI ended the 28th with 2195.44 points, which is 39.35 points (1.76%) lower than that of the previous day. This is the first time KOSPI fell below 2,200 points after the 15th and this is the largest drop since KOSPI fell by 55.61 points on the 23rd of October of last year.
KOSPI, that had been showing small slack, started to drop sharply after the news was reported that luncheon and signing ceremony were cancelled.
On this day, foreigners and individuals sold $228 million (256.7 billion KRW) and $55.4 million (62.3 billion KRW) respectively.
KOSDAQ ended this day with 731.25 points, which is 20.91 points (2.78%) lower than that of the previous day.
“Due to difference in opinions between the U.S. and North Korea that resulted in abrupt ending in the summit, investment sentiment started to freeze rapidly.” said Lee Young-gon who is a researcher from Hana Financial Investment. “Foreigners sold all of their physicals and futures and South Korea-North Korea economic cooperation stock dropped sharply.”
South Korea-North Korea economic cooperation stock showed sharp decline on this day. Out of 21 stocks that showed more than 20% drop, 19 of them corresponded to South Korea-North Korea economic cooperation stock.
Stocks such as IlshinStone (-27.30%), Hyundai Construction (-21.21%), Yooshin (-25.41%), and Dohwa Engineering (-23.68%) that are related to construction crashed one after the other. Stocks such as Ananti (-25.83%), Yongpyong Resort (-24.83%), Panstar-Enterprise (-23.51%), Hanchang (-22.71%), Daemyung Corporation (-22.54%) that are related to resort and cruise also dropped by more than 20%.
Value of Won also dropped as a result of North Korea summit. Exchange rate between Won and dollar finished the day at 1124.7 Won, which is 5.6 Won more than that of the previous day. Exchange rate that dropped to 1118.1 Won at one point started to rise sharply after sudden end of North Korea summit.
Staff Reporter Ryu, Geunil | ryuryu@etnews.com