KOSPI Falls Below 850 as Impeachment Takes its Toll on the Market

Stocks, the value of the won, and key interest rates went south on March 12 as the vote to impeach President Roh Moo-hyun was approved at the National Assembly. The KOSPI index fell 21.13 points, or 2.43 percent, to 848.80. The market lost 47 points and reached 822 after the passage of the impeachment bill. In the afternoon, the index began to rebound as the psychological shock wore down. The KOSDAQ composite index fell 14.97, or 3.44 percent, to 420.28.

As the futures index plunged by 5 percent, trading was suspended for five minutes.

Retail and foreign investors did bottom-fishing and bought 70.5 billion won and 43 billion won worth of stocks respectively.

At the Seoul Forex, the dollar rose 11.8 won in value against the won to 1180.8. Political concerns caused a flight to bonds, the investment haven. Government bonds with a three-year maturity fell three percentage points to 4.57 percent.

Kang-Woon Lee kwoon90@donga.com