Individual Investors Net Buy 4.6 Trillion KRW in Domestic Stock Market... KOSPI and KOSDAQ Close Lower

Foreigners and Institutions Net Sell 1.9 Trillion and 2.3 Trillion Won Respectively in KOSPI Market
KOSDAQ Falls Below 1000 in One Day... "Decline Due to Exchange Rate and Supply-Demand Impact"

[Asia Economy Reporter Minji Lee] Individuals purchased stocks worth 4.6363 trillion KRW in the domestic stock market, but both the KOSPI and KOSDAQ indices closed lower.

On the 26th, the KOSPI closed at 3,140.31, down 2.14% (68.68 points) from the previous trading day. The KOSPI opened at 3,203.96, down 0.16% (5.03 points) from the previous day, but due to a heavy sell-off by foreigners and institutions, the index fell below the 3,200 level.

On the 26th, when the KOSPI index started lower, dealers were working in the Hana Bank dealing room in Euljiro, Seoul. Photo by Moon Honam munonam@

On this day, individuals bought KOSPI stocks in the second-largest amount ever since April 11 (4.4921 trillion KRW), but it was insufficient to prevent the index from falling. Institutions and foreigners sold stocks worth 2.2505 trillion KRW and 1.975 trillion KRW, respectively.

Yonggu Kim, a researcher at Samsung Securities, said, “Foreigners increased their short positions on KOSPI 200 index futures for hedging transactions. Considering that Asian markets overall experienced a correction today, this should be interpreted not as a one-sided sell-off but as a passive and index-related selling due to overheating in global and emerging markets.”

Looking at the top market capitalization stocks, most declined. Samsung Electronics closed at 86,700 KRW, down 3% from the previous trading day. Others such as SK Hynix (-4.44%), LG Chem (-3.54%), NAVER (-2.01%), Hyundai Motor (-3.27%), and Kakao (-2.64%) also fell. On the other hand, Samsung Biologics (1.52%) and Celltrion (0.47%) rose.

The KOSDAQ index, which started the day at the ‘Cheonsdak’ level, dropped to the 990 level in just one day. The index closed at 994 points, down 0.53% (5.30 points) from the previous trading day. In the market, individuals bought stocks worth 414.6 billion KRW, while foreigners and institutions sold stocks worth 210.5 billion KRW and 166.4 billion KRW, respectively.

Most of the top stocks in the KOSDAQ market also declined. HL Biopharma (-0.11%), Seegene (-0.17%), Alteogen (-2.21%), EcoPro BM (-0.41%), and CJ ENM (-2.78%) fell. Celltrion Pharm (2.01%) and Pearl Abyss (1.58%) rose.

The overall weakness in the stock market on this day was analyzed to be due to exchange rates and supply-demand factors. Kyungmin Lee, a researcher at Daishin Securities, said, “Concerns about strengthened lockdown measures due to the spread of COVID-19 variants increased, and economic uncertainty expanded in the first quarter of this year compared to the fourth quarter of last year. As the dollar strengthened, the won-dollar exchange rate recovered to 1,104 KRW, showing signs of further rebound.”

He added, “Not only foreigners but also all trading entities including domestic financial investment, insurance, mutual funds, and pension funds showed massive selling pressure. It will be necessary to monitor whether the KOSPI can hold the 3,050 to 3,100 range going forward.”