KOSPI Falls Below 2400 During Trading... KOSDAQ Breaks Through Bottom

Impeachment Vote for President Yoon Seok-yeol Scheduled on the 7th
Han Dong-hoon, People Power Party Leader, Shifts to 'Support' Position
Unsettled Investor Sentiment... Individual Panic Selling

On the 6th, citizens at the Seoul Station waiting room watched news related to Representative Han Dong-hoon of the People Power Party expressing the opinion that President Yoon Seok-yeol's prompt suspension from duty is necessary. Photo by Kang Jin-hyung

On the 6th, the KOSPI and KOSDAQ indices each fell below the psychological thresholds of 2400 and 650, respectively, amid the emerging 'impeachment political crisis.' With the impeachment vote on President Yoon Seok-yeol scheduled for the weekend on the 7th, the outcome is expected to impact the stock market on the 9th of next week.

On that day, the KOSPI index closed at 2,428.16, down 13.69 points (0.56%) from the previous session. The index started slightly higher but plunged sharply in the morning to a low of 2,397.73 before buying interest reduced the losses. However, it remained above the level seen on August 5th (2,386.96).

In the KOSPI market, individual investors sold stocks worth 577.3 billion KRW, and foreign investors, who had been buyers early in the session, turned net sellers with 309.4 billion KRW worth of sales. Only institutional investors were net buyers, purchasing 826 billion KRW worth of stocks. Program trading recorded a net purchase of 350.6 billion KRW, combining arbitrage and non-arbitrage trades.

Large-cap stocks showed mixed movements. SK Hynix (-3.41%), Samsung Biologics (-0.21%), Hyundai Motor (-0.49%), Celltrion (-0.50%), Korea Zinc (-9.35%), Samsung Electronics Preferred (-0.11%), and KB Financial Group (-0.58%) declined. Meanwhile, Samsung Electronics (0.74%), LG Energy Solution (2.23%), and Kia (0.85%) rose.

The sharp market volatility in the morning was largely attributed to the remarks by Han Dong-hoon, leader of the People Power Party, regarding the 'suspension of the president's duties.' Around 9:30 a.m., Han stated, "I have determined that the prompt suspension of President Yoon Seok-yeol's duties is necessary." Until the previous day, Han had opposed President Yoon's impeachment, but his shift to support it increased the likelihood of the impeachment motion passing in the evening vote on the 7th. The impeachment motion requires 200 out of 300 seats in the National Assembly to pass.

Market experts recommend a conservative approach given the heightened political uncertainty. Lee Jae-won, a researcher at Shinhan Investment Corp., noted, "The KOSPI widened its intraday losses due to the ongoing impeachment crisis and political instability, which intensified selling by individual investors. In the KOSDAQ market, buying funds dried up, hitting new lows for the year, and the biotech sector continued to decline."

Meanwhile, the KOSDAQ index closed at 661.33, down 9.61 points (1.43%) from the previous session. The index fell more than 3% around 11 a.m., plunging to a low of 644.39 and breaking below the 650 level. This is the lowest point in the past year and the lowest since October 2022.

In the KOSDAQ market, individual investors were sole net sellers with 174.5 billion KRW worth of sales. Foreign investors (35.5 billion KRW) and institutions (141.6 billion KRW) were net buyers. Program trading recorded a net purchase of 156.3 billion KRW, combining arbitrage and non-arbitrage trades.

Large-cap stocks in the KOSDAQ market also showed mixed results. Major stock Alteogen (-1.61%), along with HLB (-0.96%), LIGAChem Bio (-0.76%), Hugel (-1.85%), Enchem (-0.69%), Classys (-3.34%), and JYP Entertainment (-0.14%) declined, while EcoPro BM (0.39%), EcoPro (1.58%), and Rainbow Robotics (1.14%) closed higher.