[Weekly Market Review] Rising Start on Optimism... Closing Down Amid 'Wuhan Pneumonia' Concerns

On the 9th, employees of the National Quarantine Station of the Korea Disease Control and Prevention Agency conducted thermal imaging body inspections on passengers arriving from China at the arrival hall of Terminal 1, Incheon International Airport. Yeongjongdo - Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Kum Boryeong] Last week, as the U.S. stock market responded to strong economic indicators by hitting new highs, the KOSPI started this week with optimism but ended the week in a downward trend due to concerns over the novel coronavirus, known as the 'Wuhan pneumonia' in China.

According to the Korea Exchange on the 25th, on the 20th, the KOSPI closed at 2262.64, up 0.54% (12.07 points) from the previous session. This was a reaction to the U.S. Dow Jones Industrial Average reaching an intraday 52-week high of 29,373.62 on the 17th. The S&P 500 index also continued to set records, closing at 3,329.62. Shinhan Financial Investment Research Center explained, "In a situation where earnings expectations are not high, the strong fourth-quarter earnings announcements from last year also drove the new high rally."

In this environment, semiconductor stocks led the domestic market early in the week. Samsung Electronics reached an intraday 52-week high of 62,800 KRW on the 20th. On the same day, SK Hynix rose by 900 KRW from the previous session to close at 99,900 KRW.

However, the spread of 'Wuhan pneumonia' dampened the thriving market. As of the 23rd, there were over 500 confirmed cases and more than 10 deaths in China alone, spreading concerns in the securities industry.

Ultimately, the KOSPI closed at 2,246.13 on the 23rd, down 0.93% (21.12 points) from the previous day. The Dow Jones also declined, falling from 29,348.10 on the 17th to 29,160.09 on the 23rd.

Seo Sangyoung, a researcher at Kiwoom Securities, analyzed, "The European stock markets declined due to President Trump's remarks about imposing high tariffs on the EU, and although the U.S. stock market showed strength, individual companies are experiencing increased daily volatility. Additionally, the decline in international oil prices and increased volatility in some commodity prices such as natural gas are expected to act as factors dampening investor sentiment. Furthermore, regarding the Wuhan pneumonia, the Chinese government announced a rapid increase in confirmed cases, and Chinese state media reported travel suspensions to Wuhan and advised Wuhan residents not to leave the city without special reasons, which remains a burdening issue."