On foreign lead, individuals flee Korean market

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On foreign lead, individuals flee Korean market

A day off for the stock market this week led to disaster. Investors who could not sell their shares because of Liberation Day on Wednesday dumped them when the stock market opened yesterday. The main index quickly fell below 1,800 points, and fear spread. Investors began disposing of stocks, and the Kospi closed below 1,700 points.
“When the market is unstable, having a day off can be poison,” said Lee Gyeong-su, an analyst at Daewoo Securities.
The biggest cause behind the fall was a sell-off by foreign investors. They disposed of shares on Wednesday and sold amounts they could have sold in two days in one. It was the first time foreign investors unloaded over 1 trillion won ($1.1 billion) worth of shares.
Individuals sold more than 700 billion won worth of shares, the second biggest sell-off by retail investors. Individual investors have been buying shares since July whenever the prices fell. On July 27, when the Kospi plunged 80 points, they purchased 713.8 billion won of stocks. When the main index fell nearly 4 percent on Aug. 1 and 10, they bought 583.8 billion won and 741.2 billion won worth of shares, respectively.
However, they turned to selling on Tuesday. The index fell 31.4 points and they sold 34 billion won worth of shares. The drop in the index was no longer seen as an opportunity to buy stocks at a bargain.
“Retail investors borrowed money and invested in brokerage issues, and brokerage issues plunged, leading to further drops in the stock market,” said Jeon U-jong, an analyst at SK Securities.


By Ko Ran JoongAng Ilbo [jbiz91@joongang.co.kr]
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