Mr. Kim (40), an ’employee ant’ who invests in Korean and US stocks, is afraid to wake up in the morning. As the New York stock market fluctuates every day, the domestic stock market crashes again and again. “At this time last year, I was happily thinking about which stocks to invest in with the Lunar New Year bonus, but now I am only concerned about when to step out to reduce losses.”
In the new year, domestic and foreign stock markets are falling day after day, making ant investors more anxious. While fears of austerity from the US are weighing down on the global financial market, some say that the domestic stock market has fallen sharply as technology companies, which have risen a lot based on liquidity, are placed in large-cap stocks.
● Domestic stock market trapped in multiple bad news
According to the Korea Exchange on the 24th, the KOSPI has fallen by more than 6% this year, except for just six trading days. On the same day, individuals and foreigners sold together, bringing the KOSPI down by nearly 1.5%. The KOSPI 200 volatility index, also called the ‘fear index’, also rose to its highest level in two months.
The stock market has been held back by the faster-than-expected and stronger-than-expected austerity measures of the US Federal Reserve (Fed). The New York stock market has been declining day by day as concerns grow that the austerity measures will be in full swing at the regular meeting of the Federal Open Market Committee (FOMC) to be held on the 25th and 26th.
Until the 21st (local time) this year, the Nasdaq index, which focuses on technology stocks, has plunged 11.99%. During the same period, major indices such as the S&P 500 Index (-7.73%) and the Dow Jones Industrial Average (-5.70%) also fell all at once. Kim Hyung-ryeol, head of Kyobo Securities’ Research Center, said, “The recent plunge in US technology stocks has made the aversion to risky assets clear. Such fears are weighing down the global stock market.”
In the aftermath of this, the domestic stock market is showing a noticeable decline compared to other Asian stock markets such as Japan and China. This is because there are relatively many technology stocks and growth stocks that are vulnerable to interest rate hikes among stocks with high market cap. In fact, tech, game, and bio stocks such as Krafton (-38.9%), Kakao Bank (-28.8%), Kakao (-20.0%), Kakao Pay (-16.0%) and Celltrion (-15.9%) fell sharply this year. .
● “The KOSPI may be pushed to the 2,500 level”
In the aftermath of the global supply chain shock, raw material prices such as international oil prices continue to rise, and concerns over Russia’s invasion of Ukraine are also overlapping, adversely affecting the Korean stock market, which is highly dependent on exports. In addition, LG Energy Solutions, the largest IPO, is expected to go public on the 27th. There are many concerns that institutions or foreigners who want to incorporate LG Energy Solutions may sell other large-cap stocks, fueling the decline in the stock market.
Yoon Seok-mo, head of Samsung Securities’ Research Center, said, “The buying force of individual investors has weakened since November of last year. Kim Young-ik, a professor at Sogang University’s Graduate School of Economics, said, “All leading economic indicators are also weakening.”
However, as the market has largely reflected concerns about tightening, some are predicting that volatility will subside once the results of this week’s FOMC are confirmed. Oh Tae-dong, head of the research center at NH Investment & Securities, said, “The drop in the KOSPI was large in the short term as the 2,800 level collapsed. Kim Hak-gyun, head of Shinyoung Securities’ research center, said, “The downtrend in stock prices will stop only when inflationary pressure falls below the market’s expectations.”
Reporter Park Min-woo minwoo@donga.com
Reporter Lee Sang-hwan payback@donga.com
