Kospi Tumbles on US Rate Fears, Then Recovers

The South Korean stock market experienced significant fluctuations on Monday due to concerns over rising US interest rates. The Kospi index initially plummeted as much as 3.55 percent to 6,547.76 shortly after opening, but then steadied and ended the day at 6,795.65, up 0.1 percent from the previous session.

The index's decline was triggered by US Federal Reserve Chair Kevin Warsh's speech at the Jackson Hole economic policy symposium, which reinforced expectations for higher interest rates. This led to a sell-off in US stocks, with the S&P 500 and Nasdaq Composite falling 0.25 percent and 0.52 percent, respectively.

The Bank of Korea's recent rate hike also contributed to negative investor sentiment. Foreign investors offloaded shares worth 919.7 billion won ($666 million), while institutional investors dumped 547.2 billion won. However, retail investors were net buyers, purchasing shares amounting to 249 billion won.