KOSPI has fallen 18% this year… The biggest decline since the financial crisis

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KOSPI has fallen 18% this year… The biggest decline since the financial crisis

The KOSPI plunged nearly 20% from the beginning of the year as concerns over an economic slowdown caused by a rapid rate hike increased the decline.

Platform stocks such as Naver and Kakao fell by more than 30% compared to the beginning of the year, and Samsung Electronics, which had dreamed of ‘100,000 electronics’, fell to ‘50,000 electronics’.

◇ KOSPI from 2,900 to 2,400… It could be the biggest drop since 2008.

According to the Korea Exchange on the 19th, starting with ‘Black Monday’ on the 13th, the KOSPI fell to -5.97% and the KOSDAQ weekly decline rate reached -8.18% from the 13th to the 17th, when it collapsed to 2,400 during the intraday on the 17th.

The KOSPI weekly decline rate was the second highest this year after January 24-28 (-6.03%), and the KOSDAQ weekly decline rate was the largest in two years and four months since February 24-28 (-8.57%) on February 24, 2020.

Since the beginning of the year, a sharp decline has been unfolding due to concerns about austerity from the US Federal Reserve, and recently, as the possibility of an economic downturn due to the US giant step (0.75 percentage point increase in interest rates at a time) has increased, the domestic stock market has also shown a sharp decline. have.

Compared to the beginning of the year, the KOSPI fell 18.02% from 2,977.65 at the end of last year to 2,440.93 on the 17th of this month, and the KOSDAQ fell 22.76% from 1,033.98 to 798.69.

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If this trend continues until the end of the year, it could record the largest annual decline since 2008 (KOSPI -40.73%, KOSDAQ -52.85%) when the global financial crisis occurred.

Stock market experts predict that there may be a brief technical rebound in the third quarter due to the perception that the stock market is exaggerated.

With inflation (inflation) and the Fed’s rapid rate hike, the majority of analysts and analysts are of the opinion that a recession will occur within the next year.

Seo Sang-young, head of Mirae Asset Securities’ Media Contents Division, said, “As central banks in each country accelerate austerity, the market is estimating the worst-case scenario that the economy is going into recession, and the stock market decline is growing. They are being hit more,” he explained.

“Since 2008, when virtually zero interest rates and unlimited quantitative easing have been completely reversed since 2008, unusual phenomena such as a sharp rise in the dollar and a sharp decline in the value of the yen have made the market more fearful.” pointed out

“The stock market may decline the most annually since 2008 (on an annual basis), but considering the sharp rise over the past two years, it is difficult to see it as a crisis as high as the financial crisis,” he said.

After falling 40.73% in 2008, the KOSPI rose 49.65% in 2009 and 21.88% in 2010. Before this year’s decline, it was up 30.75% in 2020 and 3.63% in 2021.

◇ Samsung Electronics 24%, Naver 37%, Kakao 36%↓… The stock market cap fell by 374 trillion won this year

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As of the 17th, the market caps of the KOSPI and KOSDAQ markets stood at 192.1 trillion won and 354.2 trillion won, respectively, with a combined market cap of 151.8 trillion won in the past week.

In just one day on the 13th, the KOSPI fell by 3.52% and the KOSDAQ by 4.72%, losing 88 trillion won in market cap.

Since the beginning of the year, 282.2 trillion won in the domestic stock market and 92.1 trillion won in the KOSDAQ market have decreased, resulting in a combined market capitalization of 374.3 trillion won.

In particular, the market cap of Samsung Electronics, which has been downgraded to ‘50,000 electronics’, has decreased by 110 trillion won within the year. On the 17th, Samsung Electronics gave up 60,000 won for the first time in one year and seven months since November 2020.

Large-cap stocks plummeted as foreign capital fled, leading to the stock market’s decline.

Large-cap stocks on the KOSPI fell 17.33% this year, mid-cap stocks 14.03%, and small-cap stocks 9.89%.

Among the top 10 stocks, Naver (-37.25%) and Kakao (-35.82%) fell the most, while market caps such as Samsung Electronics (-23.63%), LG Energy Solutions (-28.73%), and SK Hynix (-26.41%) The drop rate of the 1st to 3rd companies also exceeded 20%.

Hyundai Motor (-18.66%), Samsung SDI (-15.11%), Kia (-7.42%), Samsung Biologics (-6.77%), and LG Chem (-6.02%) were also unable to avoid the decline.

In addition, growth stocks such as Kakao Pay (-57.71%), Hive (-57.45%), SK Bioscience (-53.78%), and Kakao Bank (-38.73%) showed significant declines.

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Securities companies have been lowering target prices of major stocks all at once in the middle of this month due to macro (macroeconomic) instability.

Sangsang Securities Co., Ltd. lowered its target price to 74,000 won from 77,000 won, stating that Samsung Electronics could drop to the low 50,000 won level assuming the worst-case scenario. Eugene Investment & Securities lowered it from 88,000 won to 79,000 won, and Shinhan Financial Investment lowered it from 87,000 won to 83,000 won.

Hana Financial Investment lowered its target price for Naver from 450,000 won to 350,000 won.

As for Kakao, Hanwha Investment & Securities lowered it from 130,000 won to 115,000 won, and NH Investment & Securities lowered it from 140,000 won to 110,000 won. / Yonhap

〈ⓒ The Korea Economic Daily (www.dnews.co.kr), unauthorized reproduction, collection, and redistribution is prohibited.

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