[Weekly Market Review] Kosdaq Rises Over 5% on Expectations for Korean New Deal Policy... Kospi Slightly Declines

[Image source=Yonhap News]

[Asia Economy Reporter Park Jihwan] This week (May 4th to May 8th), the domestic stock market experienced a week where expectations for global economic normalization after the shock of the novel coronavirus infection (COVID-19) coexisted with concerns over US-China trade conflicts. The domestic stock market showed strong gains centered on the KOSDAQ due to expectations for the Korean New Deal policy.

According to the Korea Exchange on the 9th, the KOSPI closed at 1,945.82, down 0.09% from the previous week. On the other hand, the KOSDAQ showed relative strength, closing at 682.30, up 5.75%.

The first trading day of May, on the 4th, after the two-day holiday on April 30th and May 1st, started off poorly. The KOSPI closed at 1,895.37, down 2.68% from the previous trading day, falling below the 1,900 mark for the first time in four trading days. During the domestic market holiday, concerns about economic recession and intensifying US-China trade disputes in the US stock market acted as negative factors.

On the 6th, after the Children's Day holiday on the 5th, the US New York stock market closed higher for the second consecutive day, sending a positive signal. As states in the US increasingly eased lockdown measures implemented to curb the spread of COVID-19, expectations for economic normalization grew. On that day, the KOSPI saw continued net buying by institutional investors and succeeded in recovering the 1,920 level. The KOSDAQ also closed up over 2% with combined buying by foreigners and institutions.

On the 7th, the KOSPI closed at 1,928.61, down 0.15 points (0.01%) from the previous trading day. The KOSDAQ index closed at 668.17, up 9.77 points (1.48%). The signs of a rekindling US-China trade conflict pulled the indices down.

On the 8th, the KOSPI closed slightly higher, supported by combined buying from institutions and foreigners. The KOSDAQ also closed at 682.30, up 2.11% from the previous session. The US New York stock market showed a rally centered on tech stocks, contributing to the year's turnaround in gains. On that day, the Nasdaq fully recovered losses caused by COVID-19 and achieved a 0.1% gain for the year.

In the securities market this week, individuals bought stocks worth 1.709 trillion KRW, but institutions and foreigners sold 266.6 billion KRW and 1.5326 trillion KRW, respectively.

In the KOSDAQ, individuals sold stocks worth 270.6 billion KRW, but institutions and foreigners bought 157.1 billion KRW and 178.1 billion KRW, respectively, leading the index's rise.