KOSPI Falls Below 1,600

In the wake of surging international oil prices and foreigners` heavy selling, Korea’s benchmark KOSPI fell below the 1,600 mark. In Seoul’s foreign exchange market, the won-dollar exchange rate soared to 1,050 won per dollar for the first time in 32 months.

KOSPI fell 28.60 points (1.78 percent) yesterday from a day ago to close at 1,577.94, falling for seven straights days. It is the lowest level since March 17, 2008, when the index recorded 1,574.44.

After falling for the sixth consecutive day, Korea’s tech-heavy KOSDAQ index also fell 8.19 points (1.50 percent) to close at 538.30. It is the first time that the index has kept decreasing for six days in a row since the period ranging from July 29 to Aug. 8, 2005.

Net selling (the amount of net selling minus the amount of net buying) of foreigners, who have continued to sell stocks for 20 straight days, reached 266 billion won, in the KOSPI market. The amount of market capitalization of KOSPI reached 802.11 trillion won as of yesterday. That means a whopping 102 trillion won has vanished into thin air in about 15 trading days.

In the foreign exchange market, the won-dollar exchange rate rose 5.40 won from a day ago to close at 1050.40 won per dollar. The closing price of the won-dollar exchange rate exceeded the 1,050 won mark for the first time in 32 months since Oct. 25, 2005, when the rate reached 1,055.00 won per dollar.

Experts analyzed that the exchange rate has increased since foreigners sold their stocks, which, in turn, raised the dollar demand.