Kospi could revisit the dismal sub-2000 levels of the spring 2020 at the onset of Covid-19 pandemic next year amid little sign for upsides for the Korean capital markets rattled by the freefall in currencies around the world and rapid tightening actions.

The main index briefly slipped below 2,200 for the first time in 26 months on Tuesday. Kosdaq has been hovering below 700 from Monday for the first time since June 2020.

Market experts project Kospi to dip below 2,000 next year and hit as low as 1,920 amid gloomy earnings prospects.

The combined operating incomes of 250 companies listed in Korean stock markets are estimated at 52.6 trillion won ($36.8 billion) for the third quarter ending September 2022, down 10.3 percent from a year ago, according to market consensus compiled by local financial market tracker FnGuide. The estimate is 3.1 percent lower than market consensus made a month earlier.

The fourth quarter could be worse. Market consensus on the combined operating incomes of 227 listed firms is 41.3 trillion won, falling 4.5 percent in a month.

Downward adjustments are continuing in line with worsening economic conditions, and this is putting downward pressure on stock markets, said Jung Yong-taik, senior researcher at IBK Investment & Securities.

Analysts have adjusted down their third-quarter earnings estimate on Samsung Electronics to 13.5 trillion won from 12.85 trillion won of last month. For the fourth-quarter, earnings estimate has been lowered by 8.1 percent to 11.4 trillion won.

Earnings estimate on SK hynix has been cut 18.3 percent to 2.55 trillion won for the third quarter and 31.1 percent to 1.7 trillion won for the fourth quarter.

Downgrade is also in place for next year.

Retailers have also abandoning the stock market, selling 440.6 billion won worth on Monday and near 200 billion won on Tuesday.

Liquidation in margin accounts has been on the rise as more investors fail to bring the account balance above the required level despite margin call. The number of such accounts jumped 13 times in a month.

By Oh Dae-seok, Kang Min-woo and Cho Jeehyun

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