South Korea's KOSPI index experienced unusual fluctuations before the market opened on Monday, November 9th. At 8:50 AM local time, the predicted index was 3953.63 points, a sharp drop of 1106.06 points, or 21.86%, from the previous trading day, triggering investor concerns about a system malfunction.
However, after the actual opening, the KOSPI index stood at 5034.20 points, a difference of 1080.57 points from the predicted index. The KOSDAQ index was predicted to fall 14.66% to 549.83 points during the same period, but opened at 638.82 points.
Experts pointed out that the significant deviation between the predicted index and the actual opening price was mainly due to a large influx of forced liquidation orders accumulated from the previous stock market crash into the pre-market auction, causing an abnormal drop in the estimated transaction price.
Data shows that on November 5th and 6th, the actual forced liquidation amount in the South Korean stock market reached 842 billion won and 202.2 billion won respectively, totaling over 1 trillion won in two days.
Experts from the Korea Capital Market Research Institute stated that the forecast index is a reference indicator calculated based on pre-market buy and sell quotes, not actual transaction prices. When the market is highly volatile and orders have not yet accumulated sufficiently, the forecast index may show significant deviations. Its reference value gradually increases as the opening time approaches. Experts also cautioned that abnormal fluctuations in the forecast index may exacerbate investor panic, but even if sell orders are submitted, they will not be executed immediately but will be included in the opening auction at 9:00 AM. Therefore, investors should not rely solely on the forecast index to judge market trends and should avoid impulsive trading due to temporary abnormal quotes.
