Black Monday
South Korea's KOSPI stock index slipped below the 2,300 threshold again on July 2, the first trading day of the second half of the year, hitting the lowest point in about 14 months. This was because the investment sentiment is in a state of panic due to external unfavorable factors, such as a trade dispute between the United States and China and a sluggish denuclearization of North Korea, and concerns over a slowdown in labor force indices.
The KOSPI stock index closed at 2,271.54, down 54.59 points, or 2.35 percent, from the previous day. It is the lowest point in 14 months after 2,286.02 on May 12 last year. It showed a whopping 6.3 percent decrease in June alone.
Foreign investors net purchased shares for two days in a row, but they expanded net sale in the futures market, which led the related institutional investors to expand the program selling trend. Institutional investors net sold 400.4 billion won (US$358.04 million), leading the downturn. The KOSDAQ stock index also fell below the 800 level for the first time in six months.
Other Asian stock markets turned bearish as well. Japan’s Nikkei Stock Index closed at 21,811.93 on the same day, down 2.21 percent from the previous day. It is the lowest figure in two and a half months. China’s Shanghai Composite Index decreased 2.52 percent to 2,775.56 as it was hit by the trade dispute with the US and the manufacturing business index in June, which was released on the same day, was in the doldrums than expected. It is the lowest level since stock prices showed a steep decline in March 2016 due to China’s credit risks.