AsiaToday reporter Oh Kyung-hee
South Korea’s main stock market fell below 2,500 on Tuesday, amid growing concerns over monetary tightening in the United States. The Korea Composite Stock Price Index (KOSPI) fell to the 2,400 level for the second consecutive day after the plunge in the New York Exchange. Foreigners’ “Sell Korea” brought the index down. Experts say that market volatility will continue due to inflationary pressures.
The KOSPI closed at 2,492.97 points, down 0.46 percent from a day earlier, according to the Korea Exchange. It is the first time in 19 months the index closed below the 2,500 level. For the second day in a row, it reached the lowest point this year so far. The tech-heavy KOSDAY also fell, losing 0.63 percent, to close at 823.58.
In the stock market, foreigners sold domestic stocks for the eighth trading day. They net sold a total of 276.1 billion won. Individual investors and institutions bought 38.6 billion won and 194.6 billion won, respectively, to protect the index from falling. Institutions focused on buying large-cap stocks that were oversold.
The decline in the domestic stock index is the result of a sharp decline the U.S. stock market. In the New York Stock Exchange, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite dropped 2.79 percent, 3.88 percent, and 4.68 percent, respectively. The U.S. Consumer Price Index (CPI) rose 8.6 percent, the highest in 41 years, as federation tightening concerns rose.
Shares of most large-cap stocks fell. Samsung Electronics dropped to 61,900 won apiece, marking a new 52-week low for a third session straight. Samsung SDI and Hyundai Motor sank 3.28 percent and 2 percent, respectively, while Samsung Biologics and Naver also fell 0.25 percent and 0.39 percent, respectively. However, LG Energy Solution jumped 2.77 percent after the company announced the plan to build a new plant for battery cells for their wide use by Tesla Inc. LG Chem and Kakao also rose 0.36 percent and 0.13 percent, respectively.
Major domestic securities firms are conservative about the market, forecasting that the index could sink to 2,400 level in the second half of the year. “The domestic stock market is vulnerable to downward pressure as supply and demand capacity is declining,” Shinhan Financial Investment’s analyst Choi Yoo-june said.