Entered the Goldilocks Economic Situation
KOSDAQ Closes at 1022 Points
[Asia Economy Reporter Gong Byung-sun] Despite the KOSPI showing a decline of over 1% due to concerns about the peak and the resurgence of COVID-19, there is a forecast that there is significant room for future growth.
On the 21st, the KOSPI closed at 3,171.66, down 1.52% (49.04 points) from the previous trading day. It fell to as low as 3,165.49 at 12:50 PM but then slightly recovered.
The decline is interpreted as being caused by concerns about the peak and the resurgence of COVID-19. Kim Yong-gu, a researcher at Samsung Securities, explained, “It is true that the KOSPI index rapidly reached the 3,200 level,” adding, “The drop seems to be due to short-term issues such as the resurgence of COVID-19.” In the U.S., the 7-day average of new COVID-19 cases has reached 67,000, and the U.S. State Department has expanded its list of travel-restricted countries to 95.
However, experts diagnose that the upward trend will be maintained in the mid to long term. Researcher Kim said, “Currently, corporate fundamentals and earnings are good, and the policy environments of the U.S. and China are unfolding favorably for Korea,” adding, “The decline today is not due to structural changes but can be understood as a pause.” The Biden administration is preparing an infrastructure stimulus package worth $2.25 trillion (approximately 2,515 trillion KRW), and the U.S. Federal Reserve (Fed) has announced it will maintain zero interest rates until 2023.
The decline in the KOSPI today was led by selling pressure from foreigners and institutions. Foreigners and institutions net sold 1.4325 trillion KRW and 1.2821 trillion KRW, respectively. Individuals bought 2.7103 trillion KRW.
All sectors except paper and wood declined. The retail sector had the largest drop at -2.07%, followed by electrical and electronics (-2.01%), transportation equipment (-1.91%), chemicals (-1.77%), and insurance (-1.72%). Paper and wood rose by 1.28%.
All of the top 10 stocks by market capitalization fell. SK Hynix had the largest drop at -4.33%, followed by LG Chem (-3.25%), Celltrion (-3.17%), Samsung SDI (-2.75%), NAVER (-2.69%), Kia (-2.44%), Samsung Electronics (-1.55%), Hyundai Motor (-1.53%), Kakao (-1.26%), and Samsung Biologics (-0.48%).
At the same time, the KOSDAQ closed at 1,022.22, down 0.94% (9.66 points) from the previous trading day. It fell to 1,019.63 at 2:27 PM but then slightly recovered.
The selling pressure from foreigners and institutions led to the index decline. Foreigners and institutions net sold 126.8 billion KRW and 100.9 billion KRW, respectively. Individuals net bought 263.8 billion KRW.
Almost all sectors declined. The retail sector had the largest drop at -2.78%, followed by computer services (-1.65%), broadcasting services (-1.61%), textiles and apparel (-1.51%), and internet (-1.40%). Transportation (1.48%), publishing and media reproduction (1.14%), information devices (1.10%), and telecommunications services (0.67%) rose.
All of the top 10 stocks by market capitalization fell. Celltrion Healthcare had the largest drop at -4.15%, followed by Pearl Abyss (-3.90%), Celltrion Pharm (-3.68%), Alteogen (-3.43%), Kakao Games (-2.78%), SK Materials (-2.38%), CJ ENM (-2.28%), HLB (-1.99%), EcoPro BM (-1.79%), and Seegene (-0.24%).
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