Stock Market Keeps Plunging

The Korea Composite Stock Price Index plunged 3.5 percent on Thursday to close at 2,614.49 on fears of an imminent interest rate hike in the U.S.

The last time the KOSPI dipped below 2,700 points was in December of 2020 ahead of an unprecedented bonanza.

On Thursday, Foreign investors got rid of W1.71 trillion worth of Korean stocks, the first time in a year that they sold more than W1.5 trillion worth of Korean shares. Some 95 out of the top 100 listed companies on the KOSPI's share prices plunged.

U.S. Federal Reserve Board Chairman Jerome Powell said Wednesday that a rate hike "will soon be appropriate."

A Fed rate hike usually causes foreign capital to return to the U.S. causing stocks and currency values of emerging countries like Korea to plummet. The won also weakened W5.1 against the U.S. dollar to W1,202.8.

The Fed intends to mobilize all of its resources to tame inflation, including tapering which started last November and raising interest rates. The biggest impetus is surging U.S. consumer prices, which have been the main reason behind American President Joe Biden's laggard approval rating.