The KOSDAQ index fell over 9% during March, resulting in a negative year-to-date return. The KOSPI index maintained an upward trend compared to the beginning of the year.
According to the Korea Exchange on the 31st, the KOSDAQ index finished the day at 672.85. It dropped by 20.91 points (3.01%) just for that day, falling below the year-to-date opening price of 678.98. Although the KOSDAQ index had risen to 781.54 during trading last month, it has fallen by 71.11 points (9.56%) since the beginning of this month. This is the largest monthly decline since October 2023.
The KOSPI index closed at 2481.12 that day. This is 3.34% (80.25 points) higher than the year-to-date opening price of 2400.87, but it has decreased by around 1.6% (41.08 points) this month.
Until February this year, the KOSPI and KOSDAQ indices ranked among the top global stock indices for year-to-date returns, but weakness has continued this month, falling behind Europe, Hong Kong, Brazil, and Russia.
The uncertainty caused by U.S. President Donald Trump's push for tariffs, combined with the ongoing domestic impeachment trial that is slow to reach a conclusion, has added to the market's instability.
In particular, in the KOSDAQ market, foreign and institutional investors sold a net 497 billion won and 362 billion won, respectively, leading to significant declines. This seems to be influenced by the rapid increase in short-seller balances in the secondary battery and biotech sectors, which have a large share in the KOSDAQ market.
Many forecasts suggest that the Korean stock market will not be easy in April. The U.S. stock market is also struggling under fears of stagflation, and the possibility of China's economic stimulus measures rapidly increasing in the short term is slim.
Kang Hyun-ki, a research institute at DB Securities, noted, "The Korean stock market seems likely to experience another decline," adding, "In such times, it is important to focus on defense." He further cautioned to be wary of sectors related to leading stocks in the U.S. stock market, stating that the semiconductor sector is representative.
Lee Woong-chan, a research institute at iM Securities, said, "If the first quarter was weak only for the U.S. stock market, the second quarter will also have to digest the negative factor of tariffs outside of the U.S.," adding, "The KOSPI index is expected to attempt a rebound below 2500, but there is still much to confirm."
There are opinions that the choice of sectors by investors may become increasingly important. Amid ongoing uncertainties related to tariffs, domestic stocks may perform better than export stocks. Kim Dae-jun, a research institute at Korea Investment & Securities, remarked, "Now is the time to focus on low-risk, moderate-return investments rather than pursuing high-risk, high-return options," mentioning sectors such as holding companies, platforms, games, media, and telecommunications that can generate defensive and stable revenues.