By Kim Tae-gyu
Staff Reporter
Ever since 1983, when Korea's benchmark KOSPI was introduced, the Seoul bourse has enjoyed the ``Santa rally,'' as share prices rose 0.29 percent on Christmas Eve on average.
However, the stock market headed south on the day whenever the nation was suffering a crisis, prompting experts to dub this event the ``Santa dip.''
According to the Korea Exchange Wednesday, share prices have fallen on Dec. 24 only four times since 1997 and three of the incidences took place during difficult times ― in 1997, 2003 and this year.
``The bullish run just before Christmas is basically about people's positive sentiment over the holiday and an up-and-coming new year,'' said Lee Sun-yup, an analyst at Goodmorning Shinhan Securities.
``Along the same line, it is understandable that the KOSPI heads down on Christmas Eve during tough times. People would be more bearish if they were unhappy on a day when they were supposed to be happy. This causes the Santa dip,'' Lee said.
Samsung Securities analyst Hwang Geum-dan concurs.
``This year, we cannot see the Santa rally because of the global economic downturn. I hope we will be able to see it next year,'' she said.
On Dec. 24, 1997, the KOSPI plunged 4.07 percent amid the Asian financial meltdown, which caught a host of Asian nations including Korea off guard.
On the same date in 2003, when the mini-crisis related to troubled credit card issuers was plaguing Asia's fourth-largest economy, the KOSPI dropped 1.16 percent.
With the global financial distress rampant, the Santa dip took place this year as the KOSPI dumped 15.8 points, or 1.38 percent, to end at 1,128.51 on Wednesday.
The tech-filled Kosdaq lost 5.03 points, or 1.48 percent, to 333.73 while the Korean won gained 31.5 won against the greenback to 1,306.5 won per dollar.
``The government's announcement on the corporate restructuring plan continued to weigh on the stock market,'' SK Securities analyst Kim Young-jun said.
``You can also see it from the Santa dip perspective. There is no good news and people are disappointed. This resulted in a downward curve,'' Kim said.
On Tuesday, Financial Supervisory Services announced that the financial regulator plans to spearhead restructuring of the struggling construction and shipbuilding industries.
Builders and shipyards, which are destined to fold, are expected to be listed early next year by creditor banks, chilling investor sentiment. The non-viable firms would be liquidated or undergo workout schemes.
No. 1 builder, Daewoo Engineering & Construction, dumped 5.36 percent to 8,820 won while Daewoo Shipbuilding & Marine Engineering, the world's third-largest shipbuilder, shed 3.87 percent to 6,450 won.
Market bellwether Samsung Electronics gained 0.77 percent to 460,000 won while its cross-city rival Hynix Semiconductor tumbled 12.73 percent to 6,720 won.
Foreign investors led the bearish run with a selling spree for two consecutive sessions. They posted net selling of 101.8 billion won.
A total of 398 million shares worth 3.42 trillion won changed hands. Losers outnumbered winners 570 to 263 with a total of 14 shares reaching a daily limit decrease of 15 percent.