[Asia Economy Reporter Ji Yeon-jin] On the 28th, the KOSPI index briefly fell below 2600 during trading. Financial Services Commission Chairman Ko Seung-beom warned that the recent decline in the KOSPI was excessive and urged caution against excessive anxiety. However, panic selling by foreign investors continues ahead of the long holiday closure of the domestic stock market for the Lunar New Year holiday.
The KOSPI index started the day with a slight rise but turned to a downward trend just 18 minutes after the market opened, retreating to 2591.53 during the session. However, the decline narrowed as institutional and individual investors bought simultaneously. As of 10 a.m. that day, the index stood at 2613.83, down 0.66 points (0.03%) from the previous day. The KOSDAQ also fell to the 830 level during the session before rebounding and showing a slight decline.
The recent sharp drop in the domestic stock market is due to the confirmation of an accelerated tightening schedule at the U.S. Federal Open Market Committee (FOMC) meeting that ended on the 27th (local time), geopolitical risks stemming from Ukraine, and concerns over economic slowdown following disappointing earnings from Tesla and Intel announced overnight.
Chairman Ko Seung-beom held a financial market inspection meeting with Financial Services Commission officials that morning and stated that the recent decline in the KOSPI was excessive and that excessive anxiety was undesirable given the favorable economic conditions.
Chairman Ko emphasized, "It is true that the KOSPI has fallen nearly 250 points over the past five trading days, showing a more excessive decline compared to other major countries. Considering our economy’s strong fundamentals such as higher economic growth rates compared to major countries, continued export growth in January, and corporate profits, it is not desirable to have excessive anxiety."
Looking at the trends of major countries’ stock markets over the past five trading days, the KOSPI fell 8.7%, the S&P 500 fell 3.5%, Japan fell 5.8%, Taiwan fell 3.0%, and Germany fell 2.4%.
Chairman Ko also ordered close monitoring of overseas market trends during the Lunar New Year holiday when the domestic market is closed. He said, "There are many external variables affecting the financial market, including the rapid shift in U.S. monetary policy, the Russia-Ukraine conflict, the spread of the Omicron variant, and global supply chain disruptions. Even during the Lunar New Year holiday, please monitor overseas market trends and major issues with vigilance and make every effort to reduce financial market volatility."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
