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

After a major decline on March 3, the South 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 trading 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 this week, the Korea Composite Index has declined by more than 18%; since the start of this year, it has increased by over 20%. Additionally, since this week, the U.S. dollar against the Korean won has appreciated by approximately 1.7% in total.

South Korean stock market plunges

On March 4, the South Korean stock market experienced another sharp decline. By the close, the Korea Composite Index dropped 12.06% to 5,093.54 points. The KOSDAQ index decreased by 14% to 978.44 points.

In terms of major stocks, Samsung Electronics, SK Hynix, Hyundai Motor, Hanwha Aerospace, and others all declined significantly. Samsung Electronics fell more than 11%, SK Hynix declined nearly 10%, and Hyundai Motor dropped over 15%.

According to CCTV News, industry analysts explained that due to Iran’s blockade of the Strait of Hormuz, international oil prices surged for two consecutive days. Concerns among investors about inflation and a slowdown in global economic growth have driven a wave of selling.

Data from the Korea Exchange shows that on March 3, foreign investors net sold over 50 trillion won in the Korea Composite Index market. Among them, Samsung Electronics and SK Hynix alone experienced net sales exceeding 30 trillion won and 10 trillion won, respectively. Institutional investors net sold more than 800 billion won that day. Although retail investors net bought over 50 trillion won, this was not enough to prevent the market from falling.

Kim Xuejun, head of the research center at Korea Shinyoung Securities, stated that this year’s rapid rise in the Korean stock market has been unusually strong, resulting in a correspondingly sharp correction.

Han Zhiying, a researcher at Kiwoom Securities Korea, said it’s difficult to say that the main drivers behind this rally—improved earnings, valuation attractiveness, and policy momentum—have completely disappeared. Short-term corrections after rapid increases can help ease overheating, and in the long run, may even create more profit opportunities.

Large fluctuations in the won exchange rate

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

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

Brendan McKenna, a strategist at Bank of America in New York, said: “Our models show that if the situation continues to worsen, market sentiment will deteriorate, oil prices will keep rising, and the won could depreciate further.”