KOSDAQ Posts Largest Loss Since 9-11

The KOSDAQ index posted its biggest fall since 9-11 yesterday, closing at 601.33, down 63.98 points, or 9.62 percent. The Korea Composite Stock Price Index (KOSPI) fell as well, closing below the 1,300 mark.

At around 2:20 p.m. after the KOSDAQ fell to under 600, Circuit Breaker, a transient system that automatically halts trading when certain conditions are met, came online and put all trading on hold for 20 minutes.

The fall was the largest since the 71.60-point drop on September 12, 2001, the day after 9-11.

The country`s benchmark KOSPI closed at 1297.43, down 27.35 points, or 2.06 percent from last week as individual investors sold off stocks. Overall, the KOSDAQ dropped 153.64 points (20.3 percent) and the KOSPI lost 124.36 points (8.0 percent) within a week. A whopping 347 KOSDAQ stocks reached their daily lower limit, and 895 stocks fell, an unprecedented number.

Meanwhile, dollars were being traded at 983 won at the Seoul Exchange Market at the beginning of that day, down 3.8 won from Friday, and fell to 979.5 won as the won gained strength against the dollar. However, as analysts predicted a possible intervention by the foreign exchange authorities, dealers placed dollar-buying orders, boosting the rate to 981.3 won by the close of trading.

Wan-Bae Lee roryrery@donga.com news91@donga.com