KOSPI fell below 5,300 during trading on the 29th, triggering circuit breakers for two consecutive days and breaking through support levels previously identified by securities analysts. The decline is attributed to capitulation selling as investors engage in panic selling amid concerns over Chinese semiconductor competition, with analysts describing the market psychology as 'extremely frozen.' Han Ji-young, a researcher at Kiwoom Securities, stated that the KOSPI forward price-earnings ratio reached 5.1x, a historical low, while noting that 'suspicion that the current index level is not the bottom is widespread in the market.'
Analysts Revise Support Level Forecasts
Han Ji-young of Kiwoom Securities previously identified the 5,600 level, where the 200-day moving average is located, as a short-term support line. Goldman Sachs identified 6,800 as a key support line in a report on the 14th, with subsequent support levels at 6,500 and 6,000 if that level failed to hold. A securities firm researcher, when asked about short-term forecasts, stated 'honestly, I'm not confident.'
DB Securities Identifies Key Support Zone at 5,300-5,700
DB Securities presented the 5,300-5,700 range as a major support zone. Seol Tae-hyun, a DB Securities researcher, stated that 'approximately 17% of total trading volume is concentrated in the KOSPI 5,300-5,700 range, forming a strong resistance band' and that 'as foreigners switched from net buying to net selling based on this range, it is likely to act as a key turning point for future trend changes.'
Kang Hyun-ki Sets 5,200 as Final Defense Line
Kang Hyun-ki, a DB Securities researcher, presented 6,000 as the first support line and 5,500 as the second support line in a report on the 29th, but later lowered the forecast to identify 5,200 as the final line of defense. Kang stated that '5,200 is a level that was maintained even when all kinds of negative factors poured out at once during the war between the US and Iran' and that 'I think this line will still be defended.' Kang analyzed that the recent decline reflects shaken growth expectations for the domestic stock market beyond simple investor sentiment contraction, noting that 'the market narrative shifted from positive to negative due to the rise of Chinese AI and semiconductor companies.'
Baek Young-chan Projects 4,800-5,000 Lower Range
Baek Young-chan, head of Sangsangin Securities Research Center, presented 4,800-5,000 as the lower range for KOSPI. Baek stated that 'the current environment inevitably increases market volatility as margin calls and forced liquidations of leveraged products continue' and that 'if new exogenous variables such as a sharp deterioration in exports or a surge in exchange rates do not occur, support will be shown at the 4,800 level, which is 5 times the KOSPI P/E ratio.'
FAQ
What caused KOSPI stocks to fall below 5,300 on the 29th?
The decline is attributed to capitulation selling as investors engaged in panic selling. Concerns over Chinese semiconductor companies, including CXMT's Shanghai stock exchange listing and Chinese state-owned enterprises' development of DUV lithography equipment, raised anxieties about Samsung Electronics and SK Hynix's market dominance, freezing investor sentiment.
What support levels have analysts identified for KOSPI stocks?
DB Securities identified 5,300-5,700 as a major support zone where approximately 17% of total trading volume is concentrated. Kang Hyun-ki of DB Securities identified 5,200 as a final defense line, while Baek Young-chan of Sangsangin Securities presented 4,800-5,000 as the lower range, corresponding to 5 times the KOSPI forward P/E ratio.
