KOSPI Recovers Above 1900, Rising Over 2% as Foreign Investors Net Buy for First Time in 31 Days

[Image source=Yonhap News]

[Asia Economy Reporter Eunmo Koo] The KOSPI index recovered the 1900 level, rising more than 2% in early trading, supported by net buying from foreign investors. The KOSDAQ index also continued its upward trend for the third consecutive day, driven by purchases from institutional and individual investors.

On the 17th, the KOSPI opened at 1893.31, up 32.34 points (1.95%) from the previous trading day. The KOSPI, which started higher, extended its gains early in the session and reclaimed the 1900 level. As of 9:26 a.m., it was trading at 1901.75, up 44.68 points (2.41%) from the previous day.

The previous day, the KOSPI closed slightly lower at 1857.07, down 0.001% amid concerns over an economic downturn caused by COVID-19. Although it started lower due to weak U.S. March economic indicators and the International Monetary Fund’s (IMF) downward revision of global and Korean economic growth forecasts for this year, the index recovered most of its losses on expectations of economic stimulus following the government’s announcement of a second supplementary budget.

Overnight, major U.S. stock indices closed higher despite weak data such as mass unemployment, as optimism about the resumption of economic activities counterbalanced the negative indicators. On the 16th (Eastern Time), the Dow Jones Industrial Average closed at 23,537.68, up 33.33 points (0.14%) from the previous session at the New York Stock Exchange (NYSE). The Standard & Poor’s (S&P) 500 index rose 16.19 points (0.58%) to 2,799.55, and the tech-heavy Nasdaq closed at 8,532.36, up 139.19 points (1.66%).

Kiwoom Securities analyst Sangyoung Seo explained, “Recently, the U.S. stock market has seen gains in some biotech, healthcare sectors, and online-based companies that have reported or are expected to report solid earnings. However, sectors such as energy, finance, airlines, and hotels, which face sharply declining earnings or credit risk concerns, have underperformed. This is likely because market participants have shifted their focus from broad gains of 30-40% off the lows due to economic reopening to a more stock-specific approach.” He added that this shift is expected to influence the Korean stock market as well, leading to differentiated performance by sector and individual stocks.

Looking at trading trends by participant, foreign and institutional investors are leading the index rise with net purchases of 210.6 billion KRW and 98.7 billion KRW, respectively. Foreign investors have returned to net buying after 31 trading days. Conversely, individual investors are net sellers with 316.8 billion KRW.

By sector, electrical and electronics, textiles and apparel, manufacturing, chemicals, and distribution sectors are rising.

Among the top market capitalization stocks, Samsung SDI surged more than 5%, while LG Chem, SK Hynix, Samsung Electronics, and Hyundai Motor are also rising. On the other hand, Celltrion and others are declining.

Currently, in the KOSPI market, 705 stocks are rising without any hitting the upper limit, 142 stocks are falling without any hitting the lower limit, and 48 stocks are unchanged.

The KOSDAQ index is also rising. It opened at 631.34, up 7.91 points (1.27%) from the previous day, maintaining an early session gain of around 1%. As of 9:25 a.m., it was at 628.97, up 5.54 points (0.89%).

Regarding supply and demand, institutional and individual investors are net buyers with 30.2 billion KRW and 18.6 billion KRW, respectively, while foreign investors are net sellers with 47.2 billion KRW.

By sector, internet, semiconductors, and broadcasting services are rising, while distribution, entertainment and culture, and computer services are declining.

Among the top market capitalization stocks, EcoPro BM, Wonik IPS, CJ ENM, and Pearl Abyss are rising. Conversely, Celltrion Pharm, Seegene, and Studio Dragon are falling.

Currently, in the KOSDAQ market, 919 stocks are rising, including 2 stocks hitting the upper limit, 315 stocks are falling without any hitting the lower limit, and 77 stocks are unchanged.