Falls More Than 1% to Around 7,340 on May 8 as Investors Take Profits
The KOSPI is displayed on an electronic board in the dealing room of KB Kookmin Bank in Yeouido, Seoul, on May 7.
The KOSPI slipped more than 1% in early trading on May 8, falling back to the 7,340 range. After recently breaking above 7,000 for the first time and extending its surge to the point of eyeing 7,500 during intraday trading, the market faced growing pressure from the short-term run-up, with profit-taking selling emerging from the opening bell.
According to the Korea Exchange, as of 9:02 a.m. on that day, the KOSPI stood at 7,344.19, down 145.86 points (1.95%) from the previous session. The index opened at 7,353.94, down 136.11 points (1.82%) from the previous session, and continued to move lower. After stock prices rise steeply over a short period, sell orders often increase as investors seek to realize accumulated book gains, and the market on that day was seen as having entered such a corrective phase.
The decline drew even more attention because it came after such a large recent advance. On May 6, the KOSPI surged more than 6% to top 7,000 for the first time ever, and during trading the previous day it also briefly moved above 7,500 for the first time. With a record-breaking rise unfolding over just two days before quickly reversing into a decline, investors may increasingly see a moderation in the market’s pace as unavoidable.
At the same time, the KOSDAQ index rose 1.58 points (0.13%) from the previous session to 1,200.76. While the KOSPI, which is centered on large-cap stocks, underwent a relatively sharp correction, the KOSDAQ, which has a heavier weighting of technology and growth stocks, showed a comparatively stable pattern. Still, because the early-session figures were formed in a highly volatile stretch, the direction of the indexes could change quickly depending on shifts in investor sentiment.
Market participants are watching the possibility that the KOSPI may continue to take a breather for the time being. After climbing in one move to record-high levels, the market typically goes through a process of reassessing the drivers of further gains. Depending on future earnings forecasts, changes in supply and demand, and moves in overseas financial markets, this pattern could end as a short-term correction or develop into a phase of heightened volatility.
Yoon Young-sil
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