"How Long Will It Fall?"... KOSPI Breaks 2600 Level on President Yoon's Inauguration Day

KOSPI Falls Below 2600... Impact of US Stock Market Crash
Bitcoin Plummets to $30,000
KOSPI Down 5 out of 6 Times on Presidential Inauguration Days

On the morning of the 10th, employees are working in the dealing room at the Hana Bank headquarters in Jung-gu, Seoul.
[Photo by Yonhap News]

[Asia Economy Reporter Heo Midam] On the first day of President Yoon Seok-yeol's inauguration, the financial market is shaking. As the U.S. stock market plunged due to fears of interest rate hikes, the domestic stock market and cryptocurrency market are also struggling. In the declining market, investors are expressing anxiety and are considering ways to minimize losses.

On the 10th, the domestic stock market is showing a downward trend following the sharp drop in the New York stock market overnight. The KOSPI index, which was above 3000 points earlier this year, fell below the 2600 mark on this day, failing to recover. In particular, at 10 a.m. on this day, it recorded 2558.33, down 53.05 points (2.03%) from the previous day. This is the lowest point of the year, even lower than the intraday low of 2591.53 on January 28, and the lowest level since November 2020.

Earlier, the three major New York stock indices closed lower on the 9th (local time) due to concerns about inflation and economic slowdown. The Dow Jones Industrial Average closed at 32,245.70, down 653.67 points (1.99%) from the previous session. The Standard & Poor's (S&P) 500 index fell 3.2% to 3991.24. The Nasdaq index plunged 4.29% to close at 11,623.25.

The cryptocurrency market, including Bitcoin, has also been declining continuously. On this day, Bitcoin fell below $30,000 for the first time since July last year, dropping more than 55% from the peak recorded in November last year.

Some investors are expressing anxiety over the decline in the domestic stock market. Photo by Online Community Screenshot.

Given this situation, investors' worries are growing. In online communities related to domestic and international stocks and cryptocurrencies, comments such as "The stocks have fallen so much that I can't do anything. Is it better to just leave them alone? How long will they keep falling? How long do we have to keep digging the tunnel?", "I don't think Bitcoin will rise anytime soon," "Shouldn't the stock market rise with expectations for the new government at the inauguration? I invested, but it's miserable," and "I shouldn't do stocks. I'm just losing money continuously" were seen. Posts certifying their negative returns were also found everywhere.

Jung, a 26-year-old office worker living in Mapo-gu, Seoul, has stopped investing in cryptocurrencies due to their high volatility. Jung said, "Cryptocurrencies are too risky because their value changes constantly," adding, "A year or two ago, quite a few acquaintances invested in cryptocurrencies, but these days, it seems they don't invest much. I think it's because the cryptocurrency prices keep fluctuating, so people keep worrying about it." He added, "I stopped investing in cryptocurrencies at the end of last year, and I'm glad I did."

Some expressed the opinion that they would endure only until they recover their losses. Another office worker, Kim (27), said, "I invested in an OTT platform and suffered a big loss, so I'm just trying to cover it. I'll hold on for now, and once I recover the principal, I'll sell everything and stay away from stocks for a while."

Meanwhile, since the KOSPI index was established in 1983, most presidents have experienced a stock price decline on their inauguration day. Looking at the KOSPI fluctuation rates on the inauguration days of past presidents: ▲Kim Young-sam -2.56% ▲Kim Dae-jung -4.53% ▲Roh Moo-hyun -3.90% ▲Lee Myung-bak 1.34% ▲Park Geun-hye -0.46% ▲Moon Jae-in -0.99%. The only president whose inauguration day saw a stock market rise was former President Lee Myung-bak, with a 1.34% increase on February 25, 2008, compared to the previous trading day.