Stock Prices Collapsed Below 600 Points

The Korean Composite Stock Index showed a sharp decline for two consecutive days, collapsing below 600 points.

With major Asian stock markets such as Japan, Taiwan, and Hong Kong, following the steps in the markets of the U.S. and Europe which had also plummeted sharply last weekends, stock markets around the world showed a simultaneous downward movement.

Meanwhile, the open market interest rate recorded the lowest level in 4 months as capital, which failed to find a safe place to be invested, flocked to bond markets.

The Won-Dollar exchange rates dropped to the level of 1,160 won at a certain point during the market opening.

On Jan.27, the Korean Composite Stock Index was closed at 539.09 points, down 16.34 points, or 2.28 %, from the previous week. The figure marked its lowest close since October 11 last year (587.52 points).

KOSDAQ also dropped by 0.86 points, or 1.94%, to 43.40 points at the market closing, which was also its lowest since October 11 last year (43.67 points), renewing the previous record in 100 days.

The total trading volumes hovered merely over 2 trillion won, with the sum traded in bourses and in KOSDAQ, 1,3498 trillion won and 682.8 billion won, respectively.

The number of shares, which showed a decline in prices, outran that of rising shares, 687 shares in bourses and 647 in KOSDAQ, respectively.

In particular, shareholders, who wanted their shares to sell, failed to see their shares traded as the situation was aggravated to the point at which 46 shares in bourses were not traded at all.

The long-term concern factor of a possible U.S. war against Iraq, coupled with the Internet paralysis caused by a virus attack, dragged the stock prices into a deep slump.

The sharp decline in prices is attributed to foreign and domestic institutional investors` 140 billion won worth of net selling.

The Japanese Nikkei index fell by 122.18 yen, or 1.40%, closing the market at 8,608.47 points. In addition, Asian stock markets declined all together, with the Hang Seng index in Hong Kong dropping by 2.07 %, Taiwan by 1.68 %, and Singapore`s ST index by 2.14%, respectively.

In the bond market, circulating returns on government bonds with the maturing period of 3 years fell by 0.03% from a week earlier, recording 4.87 % per year, which is the lowest level since September last year.

Chan-Sun Hong hcs@donga.com