The KOSPI index fell more than 5% on August 3, dropping below the 6200 mark. This decline followed a 17.9% surge on July 31, which prompted profit-taking, particularly among foreign investors.
According to the Korea Exchange, the KOSPI closed at 6257.45, down 338.00 points (-5.12%) from the previous trading day. This loss represents about one-third of the gains made on July 31, when the index soared by 1001.89 points (17.91%) to reach 6595.45.
On the supply and demand front, individual investors showed notable buying interest at lower prices, purchasing a net 4.6531 trillion won in the stock market. In contrast, foreign and institutional investors sold a net 2.8429 trillion won and 1.9477 trillion won, respectively, contributing to the index's decline. Major semiconductor stocks, including Samsung Electronics (-8.76%) and SK Hynix (-8.79%), led the drop in the KOSPI.
Market analysts predict that the KOSPI will continue to experience a rollercoaster-like trend in the near term. The index has fallen approximately 31% from its peak of 9114.55 recorded on June 22, amid extreme volatility.
However, many in the financial sector believe that this sharp decline is more reflective of deteriorating investor sentiment and supply-demand issues rather than corporate performance or economic conditions. Lee Kyung-min, a researcher at Daishin Securities, stated, “Concerns about the AI and semiconductor sectors are easing with the upcoming earnings reports from big tech companies, and significant progress has been made in reducing credit balances and liquidating leverage. Currently, the KOSPI is in an undervalued zone, excessively reflecting fear, making a strategy to increase holdings effective around the 6000 level.”
Global investment bank Morgan Stanley also upgraded its investment outlook for the Korean stock market to 'Overweight' on the same day. The firm assessed the recent sell-off as driven by technical supply factors, such as leverage liquidation, rather than fundamental deterioration, and projected that the KOSPI could recover to the 9000 level in the future.
* This article has been translated by AI.
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