Due to the intense tariff policy from the United States, global stock markets experienced sharp fluctuations, but the Korean stock market fared relatively well. In particular, the KOSDAQ index rose after the announcement of the reciprocal tariff by the U.S. Analysts suggest that this is paradoxically due to the chronic undervaluation of the Korean stock market.
According to the Korea Exchange on the 13th, a comparison of the performance rates of 24 major stock indices from the Group of Twenty (G20) between the 3rd and 11th, when the U.S. reciprocal tariff was revealed, showed only the Indonesia IDX composite index (4.3%) and the Korean KOSDAQ index (1.57%) rose during this period.
The KOSDAQ index fell by 0.20% immediately after U.S. President Donald Trump announced higher-than-expected reciprocal tariffs on the 3rd, then rose by 0.57% the following day. After a crash in the U.S. stock market, it fell by 5.25% and 2.29% on the 7th and 9th, respectively, but soared by 5.97% on the 10th as the U.S. suspended the reciprocal tariff. On the 11th, it rose by 2.02%, fully recovering from the decline following the reciprocal tariff announcement.
During this period, the KOSPI index fell by 2.92%, ranking fifth among the 24 indices. Its decline was greater than Turkey's BIST100 index (-1.94%) and Australia's ALLORDS index (-2.70%), but less than the declines of other major indices in different countries.
During this period, the U.S. Dow Jones index fell by more than 6%, and European indices, including the Euro Stoxx 50 (-9.14%), along with indices from Canada, France, and Italy, dropped around 10%.
The U.S. reciprocal tariff policy is expected to have a significant impact on the global economy, to the extent that concerns about a global economic recession are growing. Analysts suggest that the resilience of the domestic stock market amidst such shocks is due to the already low state of stock indices caused by poor earnings of listed companies last year. As of the 7th, the trailing price-to-book ratio (PBR) of the KOSPI was 0.79, lower than the level during the 2008 financial crisis (0.81).
Additionally, the performance of the shipbuilding sector, which can collaborate with the U.S., has helped defend the index to some extent. In the case of the KOSDAQ index, large-cap pharmaceutical and biotech stocks, which were less affected by the reciprocal tariff policy, lifted the index.
For the time being, the stock market is expected to continue experiencing sharp fluctuations depending on the U.S. tariff policy. Choi Kwang-hyuk, an economist at LS SECURITIES, noted, "Although the U.S. has postponed the imposition of reciprocal tariffs for 90 days, forecasts for economic growth in various countries are still being downgraded," adding that "the volatility and concerns resulting from the tariff policy are temporarily expected to last until the third quarter."