Korea's Tech-Heavy Kosdaq Rebounds from "Black Monday"

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Includes: EWY, KF
by: Gary Dorsch

The Korean Kosdaq market posted a sharp rebound on Tuesday in a technical rebound, following the previous day’s "Black Monday" when the tech-heavy market suffered a near 10% fall. On Monday, the Kosdaq market suspended trading for 20 minutes to contain further falls from panic-driven sell-offs. The Kosdaq index closed down 9.6% to 601.33, the biggest daily loss in four years and four months. But it rebounded 2.6% on Tuesday, on bargain-hunting.

Korean Kosdaq Rebound

The Korea Exchange said in December that both the main Korea Stock Exchange and the Kosdaq market outperformed its peers in other countries in 2005. The Kosdaq index advanced 82.5% last year, the second best global performance following the Russian exchange with an 83.7% gain. The benchmark KOSPI climbed 50.8 percent. The combined market capitalization of Korea’s two stock markets rose 52.4% to $653 billion as of the end of November from $429 billion in December 2004.

Related: For investing in South Korea, see ETF EWY and CEF KF; comprehensive analysis on investing in Korea is presented here.

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