Sell Off Drives KOSPI Below 1,300

Driven by massive selling of foreign investors, the Korea Composite Stock Price Index (KOSPI) fell below 1,300 points.

On May 25, the KOSPI index closed at 1,295.76, down by 37.62, or 2.82 percent from the previous day. The KOSPI index has not fallen below the 1,300 point mark for about four months since January 23, when it reached 1,297.43 points.

The KOSDAQ index also went down 16.78 points, or 2.63%, from the previous day to close at 620.20 points.

Reaching a record-high 1,464.70 points on May 11, the KOSPI index has dropped by 168.94 points (11.53%) in just 11 trading days.

On May 25 in the stock market, people were busy trying to “read the mind of foreign investors.” The stock price indices were going up during early hours of trading, but they plunged rapidly as foreign investors began selling.

The 1,300 point mark, which served as the Maginot line whenever stock prices fell this year, ended up collapsing right before the stock market closing due to massive selling of foreign investors.

Wan-Bae Lee roryrery@donga.com