KOSPI Plummets from 2277 to 2239 in a Single Day

KOSPI and KOSDAQ Both Down 1%
Investment Sentiment Weakens Amid Global Economic Slowdown Concerns

[Image source=Yonhap News]

[Asia Economy Reporter Minwoo Lee] The KOSPI index, which had surged to 2277 for the first time in 15 months the previous day, fell back to the 2230 range. Concerns over 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.

On the 21st, the KOSPI closed at 2239.69, down 22.95 points (1.01%) from the previous day. This contrasts with the peak of 2277.23 reached at 11:34 a.m. the day before. It plunged just one day after hitting the highest level since October 2018.

In the stock market, individual investors net bought 361.1 billion KRW. Foreigners and institutions net sold 204.9 billion KRW and 185.3 billion KRW, respectively.

Most sectors declined. The medical precision sector fell the most, down 1.87%. This was followed by chemicals (1.59%), electrical and electronics (1.34%), transportation and warehousing (1.19%), services (1.19%), manufacturing (1.17%), and distribution (1.12%). On the other hand, paper and wood rose 1.81%. Construction (0.37%), telecommunications (0.29%), and non-metallic minerals (0.29%) also increased.

Among the top 10 market capitalization stocks, most also fell. LG Household & Health Care dropped 3.17%, NAVER 2.93%, LG Chem 2.68%, Hyundai Mobis 2.03%, Samsung Electronics 1.60%, POSCO 1.21%, Hyundai Motor 0.85%, and SK Hynix 0.60%. Samsung Biologics and Celltrion maintained their previous closing prices.

The KOSDAQ also declined, closing at 676.52, down 6.95 points (1.02%) from the previous day. Individual investors net bought 184.2 billion KRW, while foreigners and institutions net sold 52.8 billion KRW and 131.6 billion KRW, respectively.

Except for telecommunications equipment, which rose 1.58%, all sectors fell. The pharmaceutical sector had the largest decline at 1.81%, followed by entertainment and culture (1.69%), transportation equipment and parts (1.52%), telecommunications services (1.51%), and paper and wood (1.35%).

Among the top 10 market capitalization stocks, only KMV rose, increasing by 5.80%. The rest all declined, with SK Materials down 2.76%, Medytox 2.51%, and HL Biotech 2.48% showing the largest drops.

This downturn appears to be due to the possibility of economic slowdown caused by the Wuhan pneumonia situation and the IMF's downward revision of the global growth rate. Earlier, on the 20th (local time), the IMF announced that the global economy is showing a slow recovery despite the first trade agreement between the U.S. and China. It lowered the growth forecast from 3.4% announced in October last year to 3.3%. In particular, the growth forecast for emerging markets centered on India was sharply revised down from 7.0% to 5.8%.