Stocks Plunge for a Second Straight Day... Won-Dollar Exchange Rate Briefly Falls Below 1,500

As KOSPI extended its decline for a third straight session, it came under threat of falling to the 7,000 level. The KOSDAQ Index also broke below the 800 mark and slipped into the 700 range for the first time in about 10 months.
According to the Korea Exchange on the 8th, KOSPI finished the session at 7,246.79, plunging 409.52 points, or 5.35%, from the previous day. It opened 2.66% lower than the day before, but at one point during trading it rose 1.77% to 7,791.66. Selling pressure then intensified sharply in the afternoon, pushing the index back into negative territory. It has weakened for three consecutive trading days since the 6th. The KOSDAQ posted an even steeper loss. The KOSDAQ Index closed at 785.00, down 46.23 points, or 5.56%. It was the first time it had fallen into the 700 range since September last year.
Foreign investors, however, bought 331.6 billion won worth of shares on the Korea Exchange Main Board, turning to net buying for the first time in 14 trading days. Retail investors sold 35.4 billion won, while institutions offloaded 347.8 billion won. Samsung Electronics closed at 277,500 won, down 6.25%, and SK hynix ended at 2,076,000 won, down 5.68%.
At 1:31 p.m., a sell sidecar was triggered on the Korea Exchange Main Board, temporarily suspending the effectiveness of program sell orders. A sell sidecar was then activated on the KOSDAQ market at 1:33 p.m. The previous day, a sell sidecar and a first-stage circuit breaker mechanism were also triggered one after another on the KOSPI market. On this day, volatility in domestic stocks continued to rise, with simultaneous sell sidecars on both the main board and the KOSDAQ market.
Kang Jin-hyuk, a senior researcher at Shinhan Investment Corp., analyzed the situation as "a process of seeking balance as fundamentals, liquidity, and investor sentiment play a seesaw game." He added, "A rebound appeared at the psychological support level around 7,400, but once that level was broken, disappointed selling emerged."
Meanwhile, the won strengthened in the foreign exchange market. At 3:30 p.m. that day, the won-dollar exchange rate in the Seoul Foreign Exchange Market closed at 1,498.5 won, down 29.7 won from 24 hours earlier.
dschoi@fnnews.com Choi Du-seon Reporter