KOSPI, World Stock Markets Bearish

The KOSPI (Korea Composite Stock Price Index) fell by 40 points to sink below 730 on May 17. In addition, Asian stock markets including those in India, Japan and Taipei also showed bearish tendencies.

The KOSPI ended up at 728.98 to decrease by 39.48 points (5.14 percent) compared with its final price on May 14. Domestic and international bad news caused the KOSPI to drop to its lowest point in seven months since the 8th of October last year when it closed at 722.76.

At one point during the day, the KOSPI declined sharply by 45 points in another Black Monday slide following the one of a week ago (May 10).

The KOSDAQ was also down 29.18 points (7.21 percent) to close at 375.75, its lowest in approximately 14 months since the 19th of March last year when it closed at 367.70.

Inflating oil prices, rumors of an approaching rise in U.S. interest rates and the bearish trend of Asian countries have exerted bad effects on the market.

Also, experts in the stock market analyzed that individual investors were selling in large numbers on worries of increasing uncertainty in economic policy, as it is expected that the government will make efforts for “economy reformation.” The concern and uncertainty about security over the news of the reduction of US forces in Korea was a somewhat negative influence on the stock market as well.

The aggregate value of listed stocks decreased by 19 trillion and 395 billion won to 323 trillion 496 billion won. Compared with the 23rd of last month, the highest point in the year, 89 trillion and 899 billion won disappeared into the air in only 15 business days.

Individuals and foreigners conducted net selling (buying stocks-selling stocks) of 67.8 billion won and 42.4 billion won respectively. Foreigners have done net selling of approximate 2.3 trillion won in stocks from April 27.

Meanwhile, Japan’s Nikkei Average Index was down 344.58 yen (3.18 percent) compared with last weekend to close at 10,505.05 yen. The Taipei stock market also sharply dropped by 5.1 percent.

Particularly hard hit, Indian stocks were down 15 percent at one point during the day due to concerns over rising oil prices and political chaos after the change in regime.

European Stocks, which started trading in the afternoon on Korean time, also were down around two percent as many countries display a bearish trend.

Kang-Woon Lee Sung-Won Joo kwoon90@donga.com swon@donga.com