Fluctuation on bourse here to stay
The Kospi jumped 82.45 points, closing at 1,855.33 points. It was the second-highest daily increase ever. The first came on Aug. 20 when the Kospi rose 93.20 points.
Min Sang-il, a researcher at Hanwha Securities, said rapid fluctuations have been observed only a couple of times in the past, such as during the 1997-98 financial crisis and in the early 2000s when a bubble in the information and technology industry burst.
Korea’s main stock market fluctuated more this year than last, according to the local bourse operator yesterday. Many advanced stock markets, including in the United States, also showed stronger volatility this year, it said.
According to Korea Exchange, an indicator measuring daily volatility on the Kospi index was 1.4 percent this year, up from 1.2 percent last year.
Min attributed the instability to external factors, especially widening concern over a hard landing for the U.S. economy.
“The Korean economy is heavily dependent on exports to the United States and much of the fluctuation in the local stock market is determined by conditions in the U.S. economy,” Min said. “With the outlook for the U.S. economy growing dim, the Kospi is expected to continue fluctuating.”
Jang Bo-hyeong, a researcher at the Hanwha Institute of Finance, said this is not the biggest fluctuation ever. But he agreed that the amount of fluctuation is growing, augmented by the lack of direction. “[The local stock market] tends to only react to external factors,” Jang said. “Without gaining a sense of direction, the market fluctuation will get worse.”
By Moon So-young Staff Writer [symoon@joongang.co.kr]
with the Korea JoongAng Daily
To write comments, please log in to one of the accounts.
Standards Board Policy (0/250자)