KOSPI Plunged 21 Points

With a sudden drop over the past two days, the KOSPI fell to its lowest level of the year. The currency situation of the won-dollar exchange rate is unstable with the small rise (decrease in won’s value).

The Korea Composite Stock Price Index (KOSPI) plunged 21.68 points (2.73 percent), to close at 768.46, its lowest level on May 14 since it dipped to 768.11 on November 25, 2003.

The KOSDAQ market plunged 10.16 points (2.45 percent) to close at 404.93.

While KOSPI started the day up at the beginning, its path was reversed after the court’s rejection of the impeachment case against Roh Moo-hyun, and it showed a sudden drop of around 30 points.

Samsung Electronics fell below the 500,000 won level for the first time in the past four months, posting a 3.06 percent drop to close at 491,500 won.

Foreign investors and retail investors showed aggressive trading of futures product, prospecting an obscure stock market after the ruling on the impeachment.

Stock market experts prospected, “In a situation after the sudden stop in foreign investor’s buying, fluctuations in stock prices will increase, because of the U.S.’ early rise in the interest rate, China’s tight-money policy, and the rising oil price.”

With the influence of falling stock prices, the won-dollar exchange rate increased (decrease of won’s value) for the last two days. The rate rose 1.4 won to close at 1187.0 won per dollar.

Kang-Woon Lee Joong-Hyun Park kwoon90@donga.com sanjuck@donga.com