KOSPI Starts Higher... Has It Overcome Interest Rate Fears?

On the 23rd, as the KOSPI index started higher buoyed by the positive momentum in the U.S. stock market, dealers were working in the dealing room of Hana Bank in Euljiro, Seoul. Photo by Mun Honam munonam@

[Asia Economy Reporter Junho Hwang] On the 31st, the KOSPI started higher. Although the US 10-year Treasury yield surged to 1.78% intraday the previous day, which was expected to exert downward pressure on the stock market, the market appeared to have already overcome this fear.

On this day, the KOSPI opened at 3,073.39, up 3.39 points. Compared to the previous day's closing price, it started the session up 0.11%. As of 9:08 AM, the KOSPI was at 3,073.21 (up 0.10%). In the session, individual investors showed a net buying intention of 98.3 billion KRW, while institutions showed a net selling intention of 92.5 billion KRW, and foreigners showed a net selling intention of 6.6 billion KRW. At this time, among all listed stocks, 359 stocks started higher, while 399 stocks declined.

By sector, transportation and warehousing, services, medical precision instruments, paper and wood, pharmaceuticals, steel and metals, and telecommunications sectors showed upward trends. Among the top market capitalization stocks, Samsung Electronics rose 0.12% to 82,300 KRW, LG Chem increased by 2.10%, and NAVER showed a rise of about 0.40%.

Stocks that showed more than a 10% increase from the start of the session included Monami, ATEC TN, BGF, Carrysoft, SMBina, Bioptro, Agabang Company, and Myungjin Holdings.

The KOSDAQ also opened at 958.38, up 0.32 points. Compared to the previous session, it opened with a 0.03% increase. As of 9:08 AM, it recorded 958.97, up 0.09%. Individual investors were net buyers of 41 billion KRW, while foreigners and institutions were net sellers of 23.1 billion KRW and 17.8 billion KRW, respectively. Among all stocks, 580 showed gains, while 625 declined.

By sector, most sectors showed gains, led by transportation and telecommunication services. Among the top market cap stocks, Celltrion Healthcare, Celltrion Pharm, Pearl Abyss, Kakao Games, Seegene, and CJ ENM were rising. Pearl Abyss showed more than a 4% increase following news of a stock split from 500 KRW per share to 100 KRW per share.

Although the US 10-year Treasury yield rose to a 14-month high the previous day, which was expected to exert downward pressure on the stock market, the domestic market is analyzed to have somewhat overcome the interest rate rise issue.

SK Securities Research Center’s Asset Strategy Team analyzed, "Although the US 10-year yield rose to 1.72% intraday the previous day, the market is gradually showing reduced sensitivity to interest rates."