Last month, the domestic stock market experienced significant volatility, the highest since the financial crisis, prompting changes in investor behavior. As major semiconductor stocks like Samsung Electronics and SK Hynix saw substantial declines, buying interest shifted towards individual stocks and small-cap companies, leading to a stark contrast in performance among different stocks.
According to the Korea Exchange on August 2, as of July 31, a total of 1,859 stocks had declined compared to June 30, representing 70.3% of the 2,645 listed companies.
In the KOSPI market, 566 out of 917 listed stocks fell, accounting for 61.7%. In the KOSDAQ, 1,293 out of 1,728 stocks dropped, resulting in a decline rate of 74.8%. This means that nearly three out of four KOSDAQ-listed stocks recorded negative returns over the month.
The domestic stock market faced sharp corrections last month due to concerns over a peak-out in the semiconductor sector, geopolitical tensions in the Middle East, and profit-taking following a surge in the first half of the year.
The KOSPI fell by 22.2% and the KOSDAQ by 21.4% over the month, marking the largest monthly declines since the global financial crisis in October 2008.
Notably, the KOSPI plummeted by 10.84% on July 28, followed by further declines of 5.98% and 1.23% on July 29 and 30, respectively. Although it rebounded by about 18% on July 31, it remained over 1,881 points lower than the closing price of 8,476.48 at the end of June.
Despite the market downturn, individual stock performances varied widely. The biggest loser last month was Kolon TissueGene, whose stock price plummeted 86% from 93,600 won at the end of June to 13,000 won by the end of July. Following closely were The Technology, which fell 76%, and Kolon Life Science and Contentree Central, which both dropped 67%. StradVision and Justek also saw declines of 65% and 64%, respectively.
In contrast, GN HealthCare surged by 222%, marking the highest increase. ICAI rose by 87%, Bect by 86%, Enex by 85%, and Joyworks & Co. by 75% during the same period.
Market analysts suggest that the significant drop in the KOSPI has reduced price pressures, indicating that this month may see attempts at recovery, particularly among stocks that have fallen excessively. The outlook for corporate earnings remains solid, supporting expectations for a rebound.
Lee Kyung-min, a researcher at Daishin Securities, stated, "The KOSPI has entered an excessive decline phase in terms of valuation and technical aspects. Recent upward adjustments in forward earnings per share (EPS) and profit forecasts for this year and next indicate that recent negative factors have not yet impacted earnings and economic direction."
He added, "The KOSPI's 12-month forward price-to-earnings ratio (PER) is only 4.7 times, placing it in an extremely undervalued zone, the lowest since 2000. If the KOSPI can stabilize quickly around the 5,700 to 5,800 range, the sharp decline at the end of last month could normalize rapidly."
Han Ji-young, a researcher at Kiwoom Securities, noted, "Despite the KOSPI's surge on July 31, it remains in oversold and excessively declined territory. It is important to pay attention to the recovery of earnings confidence across the KOSPI, particularly through the performance of key sectors like Samsung Electronics and SK Hynix."
* This article has been translated by AI.
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