KOSDAQ fell below 800 during trading, marking the first time since September 4 last year when the index dropped to 799.53. At 2pm, the KOSDAQ index stood at 786.94, down 5.33% from the previous trading day and 9.2% below the early-month close of 866.72. The decline was driven by institutional net selling of 7,727 billion won from early month through the previous day, overwhelming individual net buying of 3,827 billion won and foreign net buying of 3,620 billion won during the same period. The index returned to levels last seen approximately 10 months ago, with a sell-side circuit breaker triggered at 1:33pm as the index briefly touched 778.70, down 6.32%.
KOSDAQ Trading Shows Sharp Intraday Decline and Circuit Breaker Activation
The KOSDAQ index fell 5.33% to 786.94 as of 2pm on the trading day. Compared to the early-month closing price of 866.72, this represented a 9.2% decline. A sell-side circuit breaker was triggered at 1:33pm, and the index briefly fell as low as 778.70, down 6.32% during trading hours.
On the day of trading, institutions net sold 334 billion won and individuals net sold 108 billion won, while foreigners net bought 442 billion won. Looking at cumulative figures from early month through the previous day, foreigners net sold Korean stocks for 13 consecutive trading days in KOSPI but net bought 3,620 billion won in KOSDAQ. This amount was similar to individual net buying of 3,827 billion won during the same period.
Institutional Selling Leads Market Decline Amid Reduced Trading Volume
Institutions net sold 7,727 billion won during the period from early month through the previous day, leading the index decline. Trading volume also decreased rapidly. On the 3rd, 6th, and 7th of the month, KOSDAQ daily trading volume fell below 7 trillion won for the first time this year, reaching 6.1568 trillion won on the 6th. On the day of reporting, trading volume stood at only 4.0480 trillion won as of 2pm, approximately two hours before market close.
Most large-cap stocks showed weakness. Alteogen, EcoPro BM, EcoPro, and Rainbow Robotics fell 5-7%, while ABL Bio dropped over 10%. Advancing stocks numbered only around 200, while declining stocks reached approximately 1,480.
Market Analysts Assess Decline as Excessive Amid Sector Weakness
Securities firms analyzed that technical oversold conditions continued alongside weakness across major sectors. Kang Jin-hyuk, researcher at Shinhan Investment & Securities, stated, "KOSDAQ approached 800 points due to large-cap weakness, and materials, parts, and equipment sectors declined overall despite some back-end process component stocks holding up." He added, "Major sector weakness continues with RSI oversold conditions."
Experts noted the absence of rotation trading patterns where funds flow from KOSPI to KOSDAQ. Hwang Seung-taek, head of Hana Securities Research Center, stated, "Both KOSPI and KOSDAQ are falling, as institutions and foreigners appear to be reducing their Korean stock market allocation." However, he added, "The decline is excessive. This trend will not continue."
Kim Jun-young, researcher at iM Securities, stated regarding the lack of a full-fledged rally despite expectations for second-half policies to resolve KOSDAQ undervaluation, "As with the past dot-com bubble, for funds to move to neglected sectors, a peak-out of leading stocks is necessary." He added, "Funds exiting Samsung Electronics and SK Hynix appear to have moved to leveraged ETF trading rather than flowing to other sectors," and "In the case of foreigners adjusting Korean stock market allocation through net selling, it will be difficult for those funds to enter other stocks."
FAQ
When did KOSDAQ last fall below 800 during trading?
KOSDAQ fell below 800 during trading for the first time since September 4 last year, when the index reached a low of 799.53.
What caused the KOSDAQ decline?
Institutions net sold 7,727 billion won from early month through the previous day, leading the index decline despite individual net buying of 3,827 billion won and foreign net buying of 3,620 billion won in KOSDAQ during the same period.
