Kospi hits annual low, won extends losses

An electronic board at a trading room in Hana Bank headquarters in central Seoul shows the Kospi and the won-US dollar exchange rate on Monday afternoon. (Yonhap)

South Korean shares hit their lowest level of the year on Monday, as market sentiment was weighed down by prolonged political uncertainty following the failure of the motion to impeach President Yoon Suk Yeol.

The local currency also continued its decline against the US dollar, fluctuating around 1,435 won throughout the afternoon.

The benchmark Korea Composite Stock Price Index, which opened at 2,392.37 points, down 35.79 points from the previous session, extended its losses during the day to touch a low of 2360.18, before closing at 2360.58. This marked the Kospi's lowest level since Aug. 5, when it hit 2,386.96.

The decline was driven mainly by retail investors, who net sold 890 billion won in Kospi. Foreign investors, once net sellers in the afternoon, closed the day as net buyers, purchasing 100 billion won in Kospi. This marked the first time foreigners swung to net purchase, following three consecutive trading days of mass sell-off following the martial law declaration Tuesday. Institutions mitigated further declines by buying a total of 692 billion won in stocks.

The tech-heavy Kosdaq also hit a record low on Monday. Opening at 649.35, the index continued its decline, falling 5.19 percent from the previous session to close at 627.01. This marked the first time the Kosdaq has fallen below 630 points since April 24, 2020, when it reached a mid-session low of 629.12.

All sectors of the Kospi declined, with the top 10 market-cap stocks losing value, except for SK hynix. Notable decliners included Samsung Electronics (-1.29 percent), Kia (-2.95 percent), Celltrion (-2.78 percent) and KB Financial Group (-2.93 percent).

The won-dollar exchange rate continued to rise, staying above 1,400 won. Opening Monday at 1,426 won, the rate spiked to a high of 1,436 won during the session. This was the highest level since the rate first surpassed 1,440 won shortly after the martial law declaration on Tuesday night, marking a two-year low. Market analysts warn that the won-dollar exchange rate could climb to 1,500 won amid growing volatility.

By Choi Ji-won(jwc@heraldcorp.com)