Kosdaq crashes to year's lowest level

The Kosdaq index plummeted to a record low for the year Wednesday.

The over-the-counter stock market tumbled to below the 110-point level during the day and closed at 110.07 points, down 3.75 points or 3.29 percent from the previous day`s index.

The Korea Stock Exchange followed suit, closing at 719.79 points, down 18.82 points or 2.54 percent, due to the aftermath of foreign investors` futures sales.

Technology stocks such as Serome Technology and Daum Communication that were expected to continue to rally again after they hit the daily permissible ceiling Tuesday also lost. Stocks of 18 of the top 20 firms in terms of the total amount of their securities turned out bearish.

The Kosdaq market started the day on a bullish note, encouraged by the strong performance of the U.S.`s Nasdaq and the U.S. Federal Reserve`s decision to leave the interest rate unchanged as expected, but the bourse crash pulled it down to the 110-point level.

Securities experts said that it was difficult to set the lowest supporting points, and noted the possibility of the Kosdaq index plummeting further cannot be ruled out due to the chronic problem of supply outweighing demand. They said that there is a limit in raising the index only through individual investors` purchases, while institutional and foreign investors` net buying disappeared.

Sohn Bum-Gyu, a researcher of Samsung Securities, forecast that the stock market fund would be further dispersed as 85 new players will soon join the Kosdaq market.

Chung Yun-Jae, senior researcher of Daeshin Economic Research Institute, observed that if the 110-point level collapses, the lowest should be dropped to the 100-point level, but he predicted that there is a possibility of a technical rebound due to the large scope of the fall. He added that attention should be paid to Thursday`s market.

Some market observers expressed concerns that many dot.com firms which fail to raise funds may go bankrupt in succession in the fourth quarter if the current bearish trend persists in the Kosdaq market.