[Weekly Market Review] KOSPI Falls 8% in One Week Amid COVID-19 Concerns

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[Asia Economy Reporter Kum Boryeong] In the last week of February, global stock markets continued to plunge due to concerns over the spread of the novel coronavirus infection (COVID-19). The KOSPI index fell below the 2000 mark.

According to the Korea Exchange on the 29th, the KOSPI opened at 2114.04 on the 24th, down 48.80 points (2.26%) from the previous trading day, and continued its downward trend to close at 2079.04. This represented a 3.87% drop compared to the previous close.

The following day, on the 25th, the index recovered above 2100 to close at 2103.61 due to buying by individuals and institutions, but from the 26th to the 28th, the stock price fell for three consecutive days. Ultimately, on the 28th, unable to overcome pandemic fears, it dropped to 1987.01, falling below the 1900 level.

The KOSPI, which was at 2162.84 on the 21st, declined by 8.13% over the week. During the same period, the KOSDAQ index also fell from 667.99 to 610.73, a decrease of 8.57%.

In the securities market, Samsung Electronics, the largest by market capitalization, also appeared to struggle under the impact of COVID-19. The closing price of Samsung Electronics shares, which was 59,200 won on the 21st, dropped to 54,200 won. This represents an 8.45% decline over the week.

Both KOSPI and KOSDAQ saw notable selling pressure from foreign investors. From the 24th to the 28th, foreign investors net sold 3.4615 trillion won in the securities market and 186.3 billion won in the KOSPI market over five trading days. In contrast, individuals and institutions net bought 2.5837 trillion won and 684.5 billion won respectively in the securities market. In the KOSDAQ market, individuals and institutions purchased 192.9 billion won and 8 billion won respectively.

Shin Seungjin, a researcher at Samsung Securities, explained, "Due to concerns over the spread of COVID-19, global stock markets could not avoid a sharp decline last week. The KOSPI recorded its largest weekly drop (-8.1%) since August 2011, when the European crisis was highlighted, breaking below the psychological support level of 2000." He added, "Meanwhile, prices of global safe-haven assets have continued to surge, reflecting widespread fears that the spread of COVID-19 will trigger a global economic recession."