KOSPI nosedives below 500 mark

The Korea Composite Stock Price Index (KOSPI) dropped below the 500 mark and hit its lowest level in 29 months. As a result, investors were thrown into a near-panic state. The KOSPI closed at 492.69 Wednesday, down 9.57 points from the previous day. This marks the lowest level since Dec. 5, 1998, when the index reached 490.71. Under pressure from the NASDAQ index, which is also in a tailspin, the KOSPI opened the day Wednesday at 496.03, down 7.23 points from a day earlier, and managed to surpass the 500 mark thanks to the government`s announcement of measures to boost the stock market at 11:05 a.m. But it began to slide sharply only 10 minutes later.

The fall was led by foreign investors, who dumped 170 billion won worth of stocks, the largest volume this year. The government unveiled market-stabilization measures, and pension and policy funds began purchasing stocks. Institutional investors engaged in program buying, but they fell short of stopping the fall. Net buying by individual and institutional investors amounted to 74.9 billion won and 93 billion won, respectively. Losers outnumbered gainers 595 to 218. Seven stocks reached their daily upper limit, while 50 hit their allowable low. By industry, all stocks except for steel and machinery fell.

Bank shares, which had played a key role in keeping the KOSPI above 500 Tuesday, fell 4.66 percent following the report that the planned merger between Kookmin and Housing & Commercial banks would be delayed. Securities also sustained a loss of 1.72 percent. ``The 500 line collapsed despite the government`s efforts. Now we foresee that 480 will be the strong support line,`` said an analyst at LG Investment and Securities.

Yonhap