South Korean stock markets have shed more than 250 trillion won in market capitalization this year. (Image courtesy of Yonhap)
SEOUL, Dec. 30 (Korea Bizwire) — South Korean stock markets have shed more than 250 trillion won in market capitalization this year, standing in stark contrast to the record-setting rallies seen in other major global markets.
According to the Korea Exchange, as of December 27, the main KOSPI market’s capitalization stood at 1,966.96 trillion won, while the tech-heavy KOSDAQ reached 333.87 trillion won. These figures represent declines of 159.42 trillion won and 94.52 trillion won respectively from the last trading day of 2023, amounting to a combined loss of 253.93 trillion won.
Samsung Electronics accounted for more than half of the total market value decline, losing 148.05 trillion won. The tech giant was particularly hit by foreign investors and institutional sellers, who net sold 10.38 trillion won and 3.94 trillion won worth of shares, respectively.
In percentage terms, the KOSPI has fallen 9.43% this year, dropping from 2,655.28 on January 2 to 2,404.77 on December 27. The KOSDAQ suffered an even steeper decline of 23.15%, falling from 866.57 to 665.97.
These losses stand in sharp contrast to the performance of other major global indices. The U.S. S&P 500 surged 26.58% while the Nasdaq jumped 33.37% during the same period. Asian markets also showed strong performance, with Japan’s Nikkei 225 rising 20.37%, and China’s Shanghai Composite and Hong Kong’s Hang Seng indices gaining 14.26% and 17.82% respectively.
According to Yonhap Infomax, among 40 major national indices across 34 countries, the KOSDAQ recorded the steepest decline. The KOSPI’s decline was the fourth worst, surpassed only by Russia (-18.94%) and Brazil (-9.77%).
“We’ve never seen the KOSPI so disconnected from global markets, nor has it faced such a diverse and continuous stream of challenges and negative events,” said Lee Kyung-min, an analyst at Daishin Securities. “Investor sentiment is severely suppressed, and markets – including stocks, currency, and bonds – are particularly sensitive to negative news rather than positive developments.”
Looking ahead to next year, analysts expect challenges to persist for South Korean markets. While the inauguration of U.S. President-elect Donald Trump and subsequent policy changes present shared challenges for global markets, Korea-specific political uncertainties are expected to further dampen investment sentiment.
“Considering the deteriorating domestic and external environment, there’s an increased possibility of negative GDP growth in Q4 this year or Q1 next year,” said Park Sang-hyun, an analyst at iM Securities.
“The weakening economic fundamentals will likely pressure the exchange rate, and prolonged political instability could further contribute to growth slowdown and national credit rating concerns, inevitably leading to additional upward pressure on exchange rates.”
Ashley Song (ashley@koreabizwire.com)
