Korean stock market, plummeting! Korean won, experiencing significant fluctuations

After the sharp decline on March 3, the Korean stock market plunged again on March 4. The Korea Composite Stock Price Index (KOSPI) triggered a trading halt during the day, with a maximum drop of over 12%; the KOSDAQ index also triggered a halt, with a maximum decline of over 14%.

As of today’s close, the Korea Composite Index fell 12.06%, to 5,093.54 points. Since the beginning of the week, the Korea Composite Index has declined more than 18%; this year, it has increased over 20%. Additionally, the US dollar has appreciated approximately 1.7% against the Korean won this week.

Korean Stock Market Plummets

On March 4, the Korean stock market plunged again. By the close, the Korea Composite Index dropped 12.06%, to 5,093.54 points. The KOSDAQ index fell 14%, to 978.44 points.

In terms of major stocks, Samsung Electronics, SK Hynix, Hyundai Motor, and Hanwha Aerospace all declined, with Samsung Electronics dropping over 11%, SK Hynix nearly 10%, and Hyundai Motor over 15%.

According to CCTV News, industry analysts said that due to Iran blocking the Strait of Hormuz, international oil prices surged for two consecutive days, and concerns about inflation and a slowdown in global economic growth fueled selling pressure.

Data from the Korea Exchange shows that on March 3, foreign investors net sold over 50 trillion won in the Korea Composite Index market, with Samsung Electronics and SK Hynix alone experiencing net sales of over 30 trillion won and 10 trillion won, respectively. Institutional investors net sold over 8 trillion won that day, although retail investors net bought over 50 trillion won, they still could not prevent the market from falling.

Kim Hak-kyun, head of research at Shinrong Securities in Korea, said that this year’s rapid rise in the Korean stock market was unusually strong, so the correction has been correspondingly sharp.

Han Ji-young, a researcher at Kiwoom Securities in Korea, stated that it is difficult to say that the main drivers behind this round of stock market gains—profit improvement, valuation attractiveness, and policy momentum—have completely disappeared. After a rapid rise, a short-term correction to ease overheating could, in the long run, bring more profit opportunities.

Korean Won Exchange Rate Fluctuations Significantly

Since the beginning of this week, as of 19:30 Beijing time on March 4, the US dollar has appreciated approximately 1.7% against the Korean won.

Several major international banking and forecasting institutions have stated that rising energy prices threaten Korea’s economic growth, and the Korean won may further depreciate.

Brendan McKenna, strategist at Wells Fargo in New York, said, “Our models show that if the situation continues to worsen, market sentiment deteriorates, and oil prices keep rising, the Korean won could further plummet.”