KOSPI Falls Below 2240... Impact of Wuhan Pneumonia and IMF Growth Rate Downgrade

After Reaching a 15-Month High of 2277 the Previous Day, Drops to 2230s in One Day

[Asia Economy Reporter Minwoo Lee] The KOSPI index, which had surged to 2277 the previous day, fell below 2240. Concerns over an economic slowdown due to Wuhan pneumonia (novel coronavirus) in China and the International Monetary Fund's (IMF) downward revision of the global economic growth rate appear to have acted as negative factors.

According to the Korea Exchange on the 21st, as of 3:05 PM, the KOSPI stood at 2239.66, down 22.66 points (1%) compared to the previous day. This contrasts with the previous day's rising market when it reached 2277.23 around 11:34 AM. It was a sharp drop just one day after hitting the highest level since October 2018.

The possibility of an economic slowdown due to the Wuhan pneumonia situation and the IMF's downward adjustment of the global growth rate seem to have dampened investor sentiment. On the 20th (local time), the IMF announced that the global economy is showing a slow recovery despite the first trade agreement between the US and China. It lowered the growth forecast from 3.4% announced in October last year to 3.3%. In particular, it significantly downgraded the growth forecast for emerging markets centered on India from 7.0% to 5.8%.

Meanwhile, as of now, individual investors have net purchased 339.7 billion KRW. Foreigners and institutions have net sold 195.3 billion KRW and 171.9 billion KRW, respectively.