The government assessed that despite recent increases in domestic stock market volatility, the fundamentals of the economy and the stock market remain strong. It has decided to enhance real-time market monitoring in collaboration with relevant agencies and to respond strictly to market disturbances led by financial authorities.
The Ministry of Finance announced that Deputy Minister Kwon Dae-young held a joint market situation review meeting at the Government Seoul Building on the morning of October 16, discussing trends in domestic and international financial markets and future response directions. The meeting included Deputy Minister Heo Jang, Bank of Korea Vice Governor Kwon Min-soo, Financial Supervisory Service Senior Deputy Governor Lee Se-hoon, and Financial Services Commission Secretary Shin Jin-chang.
Participants noted that external factors such as U.S. Treasury yields, the performance of AI and semiconductor sectors, and geopolitical tensions in the Middle East have increased volatility and uncertainty in the financial markets. They agreed on the importance of integrated monitoring and management, considering interconnections and spillover effects among markets.
Recently, both domestic and international stock markets have faced adjustments due to rising global interest rate expectations, uncertainties regarding investment and profit outlooks in the AI semiconductor sector, and risk-averse sentiment stemming from rising international oil prices. The KOSPI index fell from 7,004 on October 2 to 5,554 on October 15. The KOSPI Volatility Index (VKOSPI) also increased from 36.8 on October 8 to 55.4 on October 15.
The government analyzed that the domestic stock market exhibits relatively high volatility compared to other markets due to differences in sector weightings. However, considering the projected growth rate of around 3%, a significant current account surplus, and favorable corporate earnings outlooks, it concluded that the fundamentals of the economy and the stock market are solid.
The International Monetary Fund (IMF) raised its growth forecast for South Korea from 2.6% in July to 3.3% this month. The projected operating profit for KOSPI-listed companies is estimated at 969 trillion won as of October 14, significantly exceeding last year's figure of 312 trillion won.
The government and relevant agencies have decided to strengthen real-time joint monitoring. They plan to analyze domestic and external financial market conditions and risk factors, closely examining whether the impacts of stock market fluctuations spread to the bond, foreign exchange, and short-term money markets.
Financial authorities will respond strictly to market disturbances. The government will consistently pursue structural improvements to reduce volatility in the domestic capital market and enhance its growth potential, thereby increasing the credibility and competitiveness of the stock market.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.