"Lost the Price of a Mid-size Car": KOSPI Suffers Record Plunge, Retail Investors Panic

[The Financial News] The Korea Composite Stock Price Index (KOSPI), which had climbed above the 6,000-point level, plunged, setting new records for both the size and rate of decline. As fear spread across the market, individual investors who had been hoping for further gains were left in shock.
On the 4th, the KOSPI closed at 5,093.54, tumbling 698.37 points from the previous trading day. This figure far exceeded, in just one day, the previous record one-day drop of 452.22 points set the day before. The day’s decline rate of 12.06% also marked the steepest fall in about 25 years, surpassing the 12.02% drop recorded on September 12, 2001.
Institutional investors led the index’s decline. In the KOSPI Market, institutional investors were net sellers to the tune of 588.7 billion won, driving the downward trend. As selling intensified, a sell-side sidecar (temporary trading halt mechanism) was triggered shortly after the market opened. At around 11:17 a.m., a circuit breaker mechanism was imposed on both the KOSPI and KOSDAQ Market, the first such move in a year and seven months.
Samsung Electronics, which had been a key driver of the index’s previous gains, plunged 11.74%, while SK Hynix fell 9.58%, further undermining investor sentiment. Beyond these two stocks, every company within the top 50 by market capitalization saw its share price decline.
Online investment communities were thrown into turmoil. In the Samsung Electronics stock discussion forum, users posted dejected comments such as, "The Korean stock market has fallen harder than the actual warring parties, the United States of America (U.S.) and the Islamic Republic of Iran." Some investors vented their anger at the extreme volatility, saying, "Even the Venezuelan stock market would be more solid than this."
Shareholders of SK Hynix were likewise unable to hide their shock. One self-mocking post in the discussion room read, "In just two days, I’ve lost the price of a Grandeur sedan." Others voiced their frustration, saying, "Anyone watching this would think we’re at war with North Korea."
Even amid the panic selling, some bargain-hunting buy orders flowed in on expectations of a rebound. Unlike institutions, which dumped 588.7 billion won worth of shares, individual investors were net buyers of 79.7 billion won. Foreign investors also stepped in, purchasing 237.6 billion won worth of stocks.
Experts are cautioning against excessive fear. Han Ji-young, a researcher at Kiwoom Securities, noted, "For the KOSPI to fall below 5,000, the earnings improvement outlook that has powered the rally would have to be completely destroyed, and we are not seeing signs of that yet." Han stressed, "A cumulative two-day plunge of around 19% is an irrationally fast drop in stock prices, even taking into account index overheating risks and war-related risks."


hsg@fnnews.com Han Seung-gon Reporter