KOSPI Wavers in the Morning... Foreigners Sell Net for 3 Consecutive Trading Days

[Image source=Yonhap News]

[Asia Economy Reporter Minji Lee] The KOSPI is showing mixed trends as foreign investors continue their net selling in the early session.

As of 10:17 AM on the 19th, the KOSPI stood at 3,085.38, down 0.04% (1.28 points) from the previous trading day. The index opened at 3,089.96, up 0.11% (3.30 points) from the previous day, but has been fluctuating and showing mixed movements since then.

Looking at investor trends, individual investors alone purchased stocks worth 90.2 billion KRW, while foreigners sold stocks worth 65.1 billion KRW and institutions sold stocks worth 9.5 billion KRW. Institutions have been alternating between net buying and net selling, while foreigners are increasing their net selling volume.

By sector, transportation and warehousing (1.13%), transportation equipment (0.67%), machinery (0.61%), and insurance (0.57%) showed the largest gains. By market capitalization, Samsung Electronics (0.24%), SK Hynix (3.97%), LG Chem (0.32%), Naver (1.42%), Samsung Biologics (0.13%), and Hyundai Motor (1.49%) were on the rise.

Financial and insurance companies, classified as beneficiaries of the rise in government bond yields, also showed upward trends. KB Financial (0.23%), Shinhan Financial Group (1.24%), Hana Financial Group (1.51%), Hanwha Life Insurance (7.77%), and Hanwha Life Insurance (6.80%) were among those gaining.

At the same time, the KOSDAQ index was down 0.77% (7.49 points) from the previous session, standing at 959.93. The index opened at 967.65, up 0.02% (0.23 points) from the previous day, but then turned downward. Looking at investor trends, individual investors alone bought stocks worth 108.6 billion KRW. Foreigners and institutions sold stocks worth 78.5 billion KRW and 19 billion KRW, respectively. Foreigners are increasing their net selling volume, pulling the index down.

By sector, construction (1.21%), chemicals (0.58%), and semiconductors (0.41%) showed the largest gains. Among the top market capitalization stocks, Celltrion Healthcare (-0.74%), Celltrion Pharm (-0.68%), Seegene (-6.77%), Pearl Abyss (-4.33%), Alteogen (-2.10%), and EcoPro BM (-0.78%) declined.

Expectations for Economic Recovery Turn into Inflation Fears

The continued weakness in the domestic stock market is due to expectations for economic recovery turning into fears of inflation. Although the U.S. Biden administration is pushing a massive $1.9 trillion stimulus package and increasing COVID-19 vaccination rates, inflationary pressures have intensified, causing both global and domestic stock markets to struggle to show upward momentum.

However, some argue that the market's concerns are excessively reflected in the stock market. This view is based on the judgment that investors fear inflation and monetary tightening behind the economic recovery before actually seeing the recovery.

So-eun Ahn, a researcher at IBK Investment & Securities, explained, “Although U.S. economic indicators such as consumer spending have appeared favorable, this is only a short-term effect of the early-year cash payments, and it does not indicate a booming consumption economy. Compared to the rise in expected inflation, the actual inflation rate is only half of what it was before COVID-19, and the Federal Reserve has emphasized that it will maintain a dovish monetary policy stance.”