KOSPI Recovers to 2240 Level Early in Session on Institutional Net Buying... KOSDAQ Rises Nearly 1%

[Asia Economy Reporter Koo Eun-mo] The KOSPI recovered to the 2240 level with a slight rise early in the session, supported by institutional investors' buying. The KOSDAQ index also rose back to the 680 level as foreigners engaged in net buying.

On the 22nd, the KOSPI opened at 2,238.53, down 1.16 points (0.05%) from the previous trading day. After starting lower, the KOSPI turned upward early in the session and showed a firm tone. As of 9:25 a.m., it was trading at 2,248.66, up 8.97 points (0.40%) from the previous day.

The previous day, the KOSPI closed at 2,239.69, down 1.01% from the previous day, due to simultaneous selling by institutions and foreigners. The recent strong rise centered on semiconductors led institutions and foreigners to take profits, causing the index to decline. Meanwhile, ahead of the Davos Forum, market participants were watching remarks from major world leaders. The International Monetary Fund (IMF) lowered its global economic growth forecast for this year from 3.4% to 3.3%, heightening concerns about the economy and negatively impacting the market.

Seosangyoung, a researcher at Kiwoom Securities, said, “Looking at the risk factors that may arise in the future, uncertainties remain such as the US-China second trade negotiations, political instability in the US ahead of the presidential election, Middle East risks due to Iran, and Brexit.” However, he added, “Most of these tend to ease recently or may take a long time, so the likelihood of short-term impact is not high.” He further stated, “The novel coronavirus, also known as Wuhan pneumonia, may temporarily increase profit-taking appetite, but the extent is expected to be limited. Instead, attention should be paid to the upcoming corporate earnings announcements that are immediately approaching.”

Overnight, major indices on the New York Stock Exchange halted their record-high streak amid fears of the spread of China’s 'Wuhan pneumonia.' On the 21st (Eastern Time), the Dow Jones Industrial Average closed at 29,196.04, down 152.06 points (0.52%) from the previous day. The Standard & Poor’s (S&P) 500 index fell 8.83 points (0.27%) to 3,320.79, and the tech-heavy Nasdaq index dropped 18.14 points (0.19%) to 9,370.81.

Looking at trading trends by participant, institutional investors are net buyers with 64.6 billion KRW. In contrast, foreigners and individual investors are net sellers with 50.1 billion KRW and 6.8 billion KRW, respectively.

By sector, paper & wood, services, and medical precision industries are rising, while electrical & electronics, steel & metals, and manufacturing sectors are declining.

Among the top market capitalization stocks, NAVER, Hyundai Motor, LG Chem, Samsung SDI, and LG Household & Health Care are rising. Conversely, POSCO, Samsung Electronics, and Samsung C&T are falling.

Currently, in the KOSPI market, 456 stocks are rising without any hitting the upper limit, 288 stocks are falling without any hitting the lower limit, and 126 stocks are unchanged.

The KOSDAQ index also recovered to the 680 level early in the session, rising on foreigners’ net buying. The KOSDAQ opened at 677.05, up 0.53 points (0.08%) from the previous day, and gradually increased its gains early in the session. As of 9:22 a.m., it was trading at 681.98, up 5.46 points (0.81%) from the previous day.

Looking at supply and demand by investor type, foreign investors are net buyers with 8.3 billion KRW, leading the index’s rise. Meanwhile, institutions and individual investors are net sellers with 3.6 billion KRW and 10.9 billion KRW, respectively.

By sector, pharmaceuticals, paper & wood, and textiles & apparel are rising, while telecommunications equipment, non-metallic minerals, and other manufacturing sectors are declining.

Among the top market capitalization stocks, Hugel, Soulbrain, Studio Dragon, HLB, and CJ ENM are rising. On the other hand, Paradise, KMW, and Medytox are falling.

Currently, in the KOSDAQ market, 760 stocks are rising without any hitting the upper limit, 397 stocks are falling without any hitting the lower limit, and 153 stocks are unchanged.