Korean stock market declines alone... Market capitalization decreases by 25.3 trillion won this year

The Korean stock market closed on the 30th in 2024. This year was marked by internal and external uncertainties such as the 'Yen carry trade,' 'Trump trade,' and 'Yoon Seok-yeol's declaration of martial law,' which hindered progress. As a result, the KOSPI declined by about 10% and the KOSDAQ by about 20% over the year. Meanwhile, foreign markets soared, with the US Nasdaq rising over 30%, but the Korean stock market experienced an unprecedented decline in contrast.

According to the Korea Exchange on the 30th, the KOSPI started at 2,655.28 points on January 2nd and closed at 2,399.49 on the 30th. It has fallen by 250 points in a year. The KOSDAQ is even more drastic. The KOSDAQ started the year at 866.57 points, but as of the closing price on the 30th, it recorded 678.19, a drop of about 200 points.

As of the 27th of last month, the market capitalization of the KOSPI was 1,966 trillion 957 billion won, and the KOSDAQ was 333 trillion 874 billion won. Compared to the market capitalization on the last trading day of last year, December 28th, the KOSPI decreased by 159 trillion 415 billion won, and the KOSDAQ by 94 trillion 517 billion won. The total market capitalization lost in the Korean stock market over the past year amounts to 253 trillion 932 billion won.

The decline of the domestic stock market is even more painful as it occurred while major stock markets in the United States and other countries are soaring. This year, the U.S. Standard & Poor's (S&P) 500 index rose by 26.58%, and the Nasdaq index increased by as much as 33.37%. The Japanese Nikkei 225 index rose by 20.37%, the Shanghai Composite Index in China by 14.26%, and the Hong Kong Hang Seng Index by 17.82%, among other Asian markets. The KOSDAQ is at the bottom among the 87 Asia-Pacific stock indices compiled by Bloomberg News.

The reasons for the decline of the Korean stock market are complex. First, concerns over the unwinding of the yen carry trade spread, leading to a global stock market decline on August 5th, known as 'Black Monday.' In November, Donald Trump was re-elected as U.S. president, raising fears of strengthened tariff policies. Additionally, the domestic stock market's flagship company, Samsung Electronics, posted disappointing earnings that failed to meet market expectations, dragging down the overall index. To make matters worse, on the 3rd, an unexpected martial law increased political risks. Furthermore, due to the Federal Reserve's signals of slowing interest rate cuts, the exchange rate surged, accelerating foreign investor withdrawal. As the sluggish performance of the stock market continued, even weary individual investors turned away, further weakening the market.

Experts predict that the Korean stock market will not be easy next year. Park Sang-hyun, a researcher at iM Securities, said, "Considering that the domestic and international environment is worsening rather than improving, there is a high possibility that the GDP will contract in the fourth quarter of this year or the first quarter of next year. The weakening of domestic economic fundamentals will also put pressure on the exchange rate." On the other hand, there are forecasts that the Korean stock market will rebound because it has confirmed downward support and current political risks and other uncertainties have already been priced in.

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It was a stock market article at the end of the year... They say it won't be easy again this year...

Politics and economy... truly a chaos of confusion...