KOSPI Drops Below 2100 in One Day Due to Foreign Selling... KOSDAQ Falls Over 1%

[Image source=Yonhap News]

[Asia Economy Reporter Eunmo Koo] The KOSPI retreated below the 2100 mark after just one day, pressured by a selling spree from foreign investors in early trading. The KOSDAQ index also fell more than 1%, continuing its recent sluggish trend.

On the 26th, the KOSPI opened at 2064.07, down 39.54 points (1.88%) from the previous trading day. The KOSPI, which started lower, showed a decline of around 2% in early trading due to net selling by foreigners. As of 9:32 a.m., it was at 2075.78, down 27.83 points (1.32%) from the previous day.

The previous day, the KOSPI closed at 2103.61, up 1.18% from the previous day, supported by rebound buying. Earlier, developed markets had weakened reflecting fears of the global COVID-19 pandemic. Although the index started lower, it turned upward as bargain hunting emerged due to perceptions of an excessive drop the day before. The slowdown in the rise of domestic COVID-19 cases and the Chinese stock market’s recovery from intraday losses also had a positive effect.

Overnight, major New York stock indices plunged for the second consecutive day amid fears of the COVID-19 pandemic. On the 25th (Eastern Time), the Dow Jones Industrial Average on the New York Stock Exchange (NYSE) closed at 27,081.36, down 879.44 points (3.15%) from the previous day. The Standard & Poor’s (S&P) 500 index fell 97.68 points (3.03%) to 3,128.21, and the tech-heavy Nasdaq dropped 255.67 points (2.77%) to 8,965.61.

Sangyoung Seo, a researcher at Kiwoom Securities, forecasted, “The increased volatility in the U.S. stock market due to concerns over high valuations will ultimately burden the Korean stock market.” He added, “JP Morgan’s claim that Korea’s COVID-19 cases could reach 10,000 in a month and that Korea’s GDP growth rate for this year has been downgraded to 2.2%, with further downward revisions possible due to this situation, is also expected to have a negative impact.”

Looking at trading trends by participant, foreign investors are leading the index decline with net sales of 275.6 billion KRW. In contrast, individual and institutional investors are net buyers with 168.2 billion KRW and 100.5 billion KRW, respectively.

Most sectors are declining, with relatively large drops in electronics, electric and gas utilities, and medical precision industries.

Most of the top market capitalization stocks are also falling. SK Hynix, Samsung SDI, Samsung Electronics, Shinhan Financial Group, and Samsung Biologics are showing relatively high rates of decline.

Currently, 109 stocks are rising without any hitting the upper price limit, 745 stocks are falling without any hitting the lower price limit, and 39 stocks are unchanged.

The KOSDAQ index also retreated below the 640 level, falling more than 1%. It opened at 644.02, down 12.93 points (1.97%) from the previous day, and as of 9:31 a.m., it was at 649.33, down 7.62 points (1.16%).

By investor type, foreigners and institutions are net sellers of 18.2 billion KRW and 9.4 billion KRW, respectively, pulling the index down. Meanwhile, individual investors are net buyers of 36.2 billion KRW.

Most sectors, including transportation equipment and parts, semiconductors, non-metallic minerals, and telecommunications equipment, are declining.

Most of the top market capitalization stocks on the KOSDAQ are also falling. Wonik IPS, HL Biopharma, EcoPro BM, and KMH are among the top decliners. On the other hand, Medytox is slightly rising.

Currently, in the KOSDAQ market, 169 stocks are rising without any hitting the upper price limit, 1,106 stocks are falling without any hitting the lower price limit, and 51 stocks are unchanged.