Stock Price Index Plunged Below 800 Points

The Korea Composite Stock Price Index (KOSPI) fell by 6.2 percent during last 3 days breaking through 3 months’ 800 points mark. Kosdaq index also dropped by 7.7 percent for 5 days to below 60 point level in 5 months.

Kospi on the May 31st closed at 796.40 decreased 19.21 points (2.36 percent) from the previous day. That was the lowest mark since February 25th (791.48), and 15.1 percent lower than that on April 18th (937.61).

Stock index once climbed up to 820.51 owing to the repulsive buying after short-term slump in the morning session, but foreign investors’ selling for 71.9 billion won and institutional investors’ selling spree except for program buying led to a steep decline.

Kosdaq index also fell below 70-point level for the first time since December 27th last year (69.43) closing at 69.78 decreased 0.60 points (0.85 percent). It decreased 24.52 points (26.0 percent) from year’s highest 94.30 points on March 22nd.

People analyzed the sudden break resulted from that △ exports are weighed down by the continual decrease of won-dollar exchange rate ( rising won value), and △ foreign investors are unloading actively for two days, and △ investors are self-controlling in buying ahead of triple witching day June 12th, when index futures, options and single-name options expire simultaneously.

Main bourse index broke both the sentimental supporting line 800 points mark and four months moving average (800.19) at a time.

Chan-Sun Hong hcs@donga.com