Stock Value Collapsed below 630 Points in 11 Months

Korean Composite Stock Index (KCSI) collapsed below 630 points in 11 months.

Transaction amount also recorded lowest and the anxiety that US stock price drop will lead to further decrease of stock value in Korea fanned the trend

On the 7th, KCSI declined and closed at 627.40 point, dropped by 23.52 points (3.61%) compared to the weekend of the last week. It was the lowest level since 22nd of October of the last year. Transaction amount was also lowest level with 1.51 trillion won since 7th of October of the last year (1.48 trillion won). Foreigners took net selling position for KOSPI 200 Futures with 2,423 dealings (95.3 billion won), and Futures December dropped by 3.15 points (3.85%). It caused Futures of 142.4 billion won to be selling position and resulted in the decrease of stock value. Foreign investors took selling position with 16.6 billion in stock market and 3.3 billion won in Kosdaq.

Kosdaq Index closed at 46.80 points dropped by 1.22 points (2.52%). The transaction amount was 377.9 billion won at lowest level for this year as well as since 22nd of Oct 1999 (372.9 billion won).

The critical reason for the decrease of stock value was the contraction of investors’ confidence by concurrent decline in world stock market such as US, Japan, EU, Asia, etc.

In Tokyo, Nikkei Average Stock Value closed at 8,688.00 Yen dropped by 339.55 Yen (3.76%) and recorded lowest level for last 19 years since June of 1983. Hansen Index of Hong Kong dropped by 183.13 point (2.02%), and in Taiwan the index dropped by 3.53% and closed at 3,924.13 points below 4,000 points.

The experts forecast that there is a possibility of decline of KCSI below 600 points because 630 points was collapsed even in bullish tendency of last November and foreign stock markets are under concurrent decline tendency. On the other hand, some experts forecast carefully the possibility of bullish market further if US market turns toward bullish market.

Chan-Sun Hong hcs@donga.com