China blockade, US austerity, war in Ukraine
Pushed until 2615 midday, ‘flesh ice’
Falling further vs. Tight rebound prospects soon
On the 27th, the KOSPI closed at 2639.06, down 1.1%. As the won-dollar exchange rate exceeded 1,265 won per dollar for the first time in two years and one month, foreign investors net sold 678.7 billion won worth of stocks on the same day. A dealer passes in front of a billboard at Kookmin Bank’s dealing room in Yeouido, Seoul. / Reporter Kim Byung-eon
The domestic stock market collapsed as concerns about stagflation (inflation in the midst of a recession) grew. The results of major US companies also fell short of expectations amid the overlapping negative factors such as concerns about the Chinese lockdown in Beijing, the US central bank’s austerity policy, and the prolonged war between Russia and Ukraine. In one month, the market capitalization of the stock market has evaporated by 73 trillion won.
On the 27th, the KOSPI finished trading at 2639.06, down 1.10%. At the beginning of the market, it also fell to 2615.50, the low level of this year (2614.49). Foreign investors threw 678.7 billion won worth of money. Institutions also net sold 240 billion won. Only individual investors net bought 906.9 billion won worth of shares, supporting the index.
Most of the top-cap stocks were down. Samsung Electronics closed at 65,000 won, down 1.66 percent on the same day, rewriting its 52-week low. SK Hynix also fell 2.25%. LG Energy Solutions, which has released the amount of protection deposits, also fell 1.30%. Major growth stocks such as Naver (-2.26%), Kakao (-2.0%), and Pearl Abyss (-24.29%) also plunged due to concerns about the performance of US big tech companies.
The US stock market fell sharply the previous day. The Nasdaq fell 3.95% as news that Beijing could be shut down following the spread of Corona 19 stimulated concerns about a global economic slowdown. Russia’s foreign minister, Sergei Lavrov, mentioned the possibility of a nuclear war. As most of the companies that announced their earnings on the day lowered their guidance for the future, concerns over an economic slowdown have grown.
The KOSDAQ index also closed at 896.18, down 1.64%. Oh Tae-dong, head of the research center at NH Investment & Securities, said, “There are also concerns that the US Fed’s aggressive tightening may eventually lead to a contraction in the real economy.
Experts have mixed views on the future of the KOSPI. Jung Yong-taek, chief economist at IBK Investment & Securities, said, “As the economic slowdown becomes visible in the second half of the year, the stock market will receive more bearish pressure.
On the other hand, there is also an analysis that it is time for a technological rebound. “As inflation passes its peak and the Fed begins to raise interest rates in earnest, the domestic stock market could also rebound in May or July,” said Oh.
By Shim Seong-mi, staff reporter smshim@hankyung.com
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