South Korea Faces Largest Stock Selloff Since 2008, Currency Plummets

South Korean markets plunged on Tuesday. The KOSPI fell 4.3% amid heavy selling across sectors.

Scope of the rout

The index’s slide from its late-February record closing high reached 19.9%. That move put it on the brink of a bear market.

March produced a 19% monthly drop. It was the largest monthly fall since 2008.

Currency and exchange rate

The won weakened sharply. It slipped past the 1,500-per-dollar mark and traded around 1,529.11 to the dollar.

The currency’s fall added pressure to an already volatile market.

Foreign outflows

Over March, foreign investors sold a net 35.9 trillion won. That equals about $23.5 billion.

Fund outflows from Korean equities reached record highs for the month.

Where selling concentrated

Global investors targeted chipmakers. Samsung Electronics dropped 5.2% on Tuesday.

SK Hynix tumbled 7.6% on the same day. Both names fell more than 20% through March.

Goldman Sachs analysis showed foreign ownership of these firms hitting lows not seen since 2022.

Drivers and market reaction

Analysts linked the turmoil to the Middle East war and rising energy costs. Investors reduced risk across assets.

J.P. Morgan’s Rajiv Batra said the rush was positioning-driven. Traders unwound profitable, highly concentrated bets without first assessing growth or earnings damage.

Market watchers noted South Korea has seen its largest stock selloff since 2008, while the currency plummets amid global risk-off flows.

Despite the losses, the earlier rally this year had left KOSPI substantially higher year-to-date before March’s outflows.

Filmogaz.com