KOSPI · October 23, 2008
The plunge one day before the bottom
-7.48%
single-day change vs previous close
Part of a longer stretch
The KOSPI in the financial crisis
near the end of it · 2007-10-31 → 2008-10-24, -54.54% over the whole period
What happened that day?
- The KOSPI fell 7.48% on the day. The bottom of this phase came the very next session
- The won passed 1,400 to the dollar intraday, its weakest since the Asian crisis
- Korea's problem was dollars, not share prices. Banks had borrowed short abroad and lent long, and could not find the dollars as maturities came due
- What makes that structure dangerous is that it breaks on timing rather than on the borrower being unsound. It is the same shape as 1997
- So the market began classifying Korea as a crisis country again
- It bottomed the next day, and six sessions later the currency swap with the US Fed turned the tide completely
Sources
Every figure on this page is recomputed from the original daily closing prices and checked against them at build time. The account of what happened is written from the sources listed above.