With the KOSPI index plunging more than 18% over two days in the wake of U.S. and Israeli airstrikes on Iran, individual investors who put money into the Korean stock market fell into panic.
On the 4th, the KOSPI index closed at 5,093.54, a plunge of 12.06% (698.37 points) from the previous trading day. This surpasses the largest-ever decline recorded during the Sept. 11, 2001, terrorist attacks.
Large-cap KOSPI stocks that had led the market also crashed. Samsung Electronics and SK hynix fell more than 11% and 9%, respectively, and Hyundai Motor also dropped 15%.
Individual investors who had jumped on the Korean stock market's bull run fell into panic. In major stock discussion boards on Naver Pay Securities, investors said, "Total revenue went from 13 million won to minus 700,000 won," "At this point, aren't virtual assets safer than the highly volatile Korean stock market?" and "In just two days, a new Grandeur disappeared," among other reactions.
Some saw now as a buying-the-dip opportunity. An investor in a discussion board said, "The KOSPI has become significantly undervalued due to this drop," adding, "If the KOSPI index falls below 5,000, I plan to buy in tranches."
Cases of "double inverse" investors, who had been relatively sidelined during the Korean stock market's upswing, also drew attention. KODEX 200 Futures Inverse 2X ETF, a representative double-inverse product, surged 45% over the two days the KOSPI index soared.
One double-inverse investor said, "In just two days after investing in a double-inverse ETF, my return rate came close to 50%," adding, "I bought 7 million shares at 235 won and am currently up 47%."
Meanwhile, in the securities industry, some analysts said volatility could continue for the time being, but the current drop is excessive.
Cho Ain, a Samsung Securities researcher, said, "Given the high uncertainty in the course of the war, a volatile market could persist for the time being," but noted, "Considering fundamentals and earnings, the current share price decline is excessive."
Cho added, "There is little practical benefit to selling in the current range, and there is room for dip-buying inflows following the short-term plunge," and analyzed, "Assuming the military conflict between the United States and Iran is resolved within four weeks, the current range can be seen as reflecting excessive fear."