"Limited Impact of US Tightening"... KOSPI Declines but Returns to 3,000 Points

[Asia Economy Reporter Ji Yeon-jin] On the 17th, the KOSPI index showed a downward trend due to the early interest rate hike by the U.S. Federal Open Market Committee (FOMC). However, the KOSDAQ rather recovered the 1000-point level, and the KOSPI also declined mainly in large-cap stocks that had risen significantly, leading to an assessment that the market shock from tightening was not severe.

As of 10:10 a.m. on the same day, the KOSPI index was at 3,255.19, down 23.49 points (0.72%) from the previous day. Foreigners and institutions sold net amounts worth 171.9 billion KRW and 315.6 billion KRW respectively, while individuals bought stocks worth 481.8 billion KRW.

Most of the top market capitalization stocks showed a downward trend. Samsung Electronics fell 1.10%, breaking below 81,000 KRW, and SK Hynix dropped 2.70%, showing the largest decline among the top 10 market cap stocks. LG Chem rose 2.85% following news of its subsidiary expanding battery supply, and Kakao also turned positive (+0.35%) due to individual buying, reclaiming the 3rd place from Naver.

At the same time, the KOSDAQ index was trading at 1,000.43, up 1.94 points (0.19%) from the previous day. Individuals (37.5 billion KRW) and foreigners (9.1 billion KRW) continued net buying, while institutions sold net amounts worth 40.9 billion KRW.

EcoPro BM surged 6.78% to 207,800 KRW, and Celltrion Pharm also showed an upward trend (+0.74%). Celltrion Healthcare showed strength in the early session but turned down (-0.08%).

CJ ENM (+2.15%), HL Biopharma (+0.91%), and SK Materials (+2.20%) recorded gains, while Kakao Games (-1.76%), Pearl Abyss (-2.19%), Seegene (-1.25%), and Alteogen (-1.70%) declined.

Lee Jin-woo, head of investment strategy at Meritz Securities, said, "The timing of the interest rate hike has been brought forward by about six months, which is interpreted as a breather centered on large-cap stocks in the KOSPI. The KOSDAQ has been less affected because it has risen less than the KOSPI so far, and since this is more about the interest rate hike being earlier than expected rather than a tightening perception, a slight adjustment is expected."

Seo Sang-young said, "The Fed's significant upward revision of inflation forecasts and adjustment of the timing of rate hikes is a burden and could negatively affect emerging market stocks. The Korean stock market, after hitting a record high the previous day, is likely to see profit-taking sales, but the decline will be limited mainly to stocks with high expectations for earnings improvement."