Anna Jiwon Park has been covering the politics at The Korea Times since the summer of 2024, when she joined the press pool for the Office of the President in Korea. Prior to that, she spent about five years reporting extensively on financial markets, regulatory authorities and the financial industry. She joined The Korea Times in 2019 after spending eight years as a broadcast journalist at Arirang TV, Korea’s leading global broadcaster, covering politics, defense and culture.
KOSPI falls below 3,000 for first time in six months
An employee at the headquarters of Hana Bank in central Seoul looks at monitor in the bank's dealing room. KOSPI ended at 2,962.17 at Tuesday's closing. Yonhap
By Anna J. Park
Foreigners dump shares on inflation worries
By Anna J. Park
Korean stocks suffered heavy losses Tuesday in the wake of an overnight slump on Wall Street with foreign investors dumping shares as oil prices stoked inflation worries amid continued fears over global supply chain disruptions.
The benchmark KOSPI fell below 3,000 points for the first time in six months to close at 2,962.17, down 1.89 percent from the previous trading session. The secondary Kosdaq market also dropped 2.83 percent to finish at 955.37.
Tuesday's fall was an expected reflection of the disappointing overnight performance of U.S. stock markets, with the S&P 500 dipping 1.3 percent and the tech-focused Nasdaq dropping 2.14 percent. Global oil prices also hit their highest levels since 2014.
Reflecting this, the nation's benchmark index began trading at 2,998.17 in the morning, down 0.7 percent. It fell as low as 2,953.64 at 2:43 p.m., but recovered slightly before the close although the number was the lowest since March 25.
The share prices of the country's top two companies in terms of market capitalization, Samsung Electronics and SK hynix, fell ― by 1.37 percent and 2.1 percent, respectively ― as did all top 12 listed companies on the KOSPI, including Naver, Kakao, LG Chem, Hyundai Motor and Samsung Biologics.
Foreign investor selling led Tuesday's fall, as they net sold 623.6 billion won ($524 million) worth of local stocks, while retail investors and institutional investors each net purchased 355 billion won and 235 billion won worth.
Market experts forecast the benchmark index could fall as low as the 2,900 range this month. KB Securities suggested the lowest prediction at 2,920 points, saying the most serious issue among global market uncertainty would be inflationary pressure.
Kiwoom Securities predicted 2,930 as the lowest level for the KOSPI this month.
“The market faces fallouts from the China Evergrande Group and inflationary concerns, which add downward pressure on the KOSPI in October,” Kiwoom Securities' strategic analysis paper stated.
Daishin Securities forecast 2,950 as the possible lowest point for the KOSPI.
“The fundamental problem is inflationary pressure accompanied by concerns over economic downturns. Now is the time to focus on managing market risks until signals of stabilization in global supply chains are confirmed,” Lee Kyoung-min, an analyst at Daishin Securities, said.
However market experts remain optimistic that the shock in the stock market will be limited based on corporations' solid fundamentals. They say the foreign investors' exit from the Korean stock markets would be limited by October, simply from the perspective of the won-dollar exchange rate. Also as the KOSPI has been on a downward move for the past three months, lowered corporate valuations could attract further investment as the country's main exporters have seen a solid performance during the third quarter.