The KOSPI index fell below 2300 during trading. This is the first time in 8 transaction days since the 10th.
As of 1:21 p.m. that day, the KOSPI index was trading at 2391.16, down 44.77 points (1.84%) from the previous transaction day. The KOSPI index, which started at 2429.63, increased its decline in the afternoon.
This is the first time the KOSPI index has fallen below 2400 since it plunged to 2384.51 due to increased political uncertainty from martial law on the 10th of this month. At the same time, the KOSDAQ index was down 2.17%, trading at 669.51. The KOSDAQ index fell to the 660 level for the first time since the 11th of this month (during trading at 661.71).
The impact of the hawkish stance from the U.S. Federal Open Market Committee (FOMC) continues, leading to a large-scale exit of foreign and institutional funds. Lee Jae-won, a researcher at Shinhan Investment Corp., noted, "The KOSPI during the day is showing signs of foreign investors exiting the spot and futures markets due to the hawkish FOMC," adding that "institutions are also showing net selling of more than 150 billion won in the spot market."
At the same time, foreign and institutional investors were net sellers of 646.4 billion won and 244.4 billion won, respectively. Only individuals were net buyers, purchasing 803.3 billion won.
On the 18th (local time), the U.S. Federal Reserve's monetary policy decision-making meeting (FOMC) reduced the benchmark interest rate by 0.25 percentage points to 4.25% to 4.50%.
While market expectations and the magnitude of the interest rate cut matched, the Federal Reserve's dot plot indicated that it expects to cut rates twice (0.5 percentage points) next year, increasing market uncertainty. Initially, the Federal Reserve had announced plans to cut rates four times, totaling 1 percentage point more next year.
In its subsequent statement, the Federal Reserve evaluated, "Labor market conditions have generally eased since early this year, and while unemployment has risen, it remains low," and noted that "inflation has made progress toward the committee's target of 2% but remains somewhat elevated."
As a result, the New York Stock Exchange dropped sharply on the 18th. The Dow Jones Industrial Average fell 2.58% from the previous transaction day, while the Standard & Poor's 500 index and the Nasdaq index also decreased by 2.95% and 3.56%, respectively. The New York Stock Exchange did not rebound overnight and remained in a stable range.
However, there are also prospects that this market decline may end in the short term. Lee Eun-taek, a researcher at KB Securities, stated, "The current hawkish Federal Reserve is far from 'trend tightening' and believes this is merely a short-term correction, which could be a buying opportunity."