KOSDAQ Turns Down... 'Cheonsdak' Maintains
On the morning of the 22nd, employees are working in the dealing room at the Hana Bank headquarters in Jung-gu, Seoul. [Photo by Yonhap News]
[Asia Economy Reporter Minwoo Lee] The KOSPI continues its firm upward trend, similar to the early trading session. Although selling pressure has emerged ahead of uncertainties surrounding liquidity reduction by U.S. financial authorities, the index's decline remains limited as investors hope that Jerome Powell, Chairman of the U.S. Federal Reserve (Fed), will make remarks in Congress to alleviate these uncertainties.
As of 11:03 a.m. on the 22nd, the KOSPI stood at 3,258.76, up 0.55% from the previous day. After opening at 3,245.79, up 0.15% (5 points) from the previous day, the 3,250 level has been maintained.
Sangyoung Seo, a researcher at Mirae Asset Securities, explained, "Although there is overall market uncertainty with selling pressure due to concerns over liquidity reduction, the decline is limited amid expectations that Fed Chair Powell will address these concerns in his congressional remarks. There also seems to be an effect from expectations that the manufacturing Purchasing Managers' Index (PMI) of various countries, to be announced soon, will show a slight decline."
On the 21st (local time), Powell appeared before the U.S. House of Representatives' COVID-19 Response Subcommittee and, in a document outlining his remarks, projected that if the economic recovery continues, inflation will be a temporary phenomenon.
Foreign investors continue to buy in the KOSPI market. At the same time, foreigners made net purchases worth 144.4 billion KRW, marking a return to net buying after three trading days. Individuals and institutions sold net amounts of 130.8 billion KRW and 30.8 billion KRW, respectively.
Most sectors showed gains. The order of increase was textiles and apparel (2.21%), securities (1.72%), machinery (1.54%), and banking (1.42%). Pharmaceuticals (-1.18%) and transportation and warehousing (-0.01%) declined.
The KOSDAQ reversed to a decline. It fell 0.14% to 1,009.59 compared to the previous day. After starting with a firm opening at 1,012.01, it turned downward but still maintained the 1,000 level.
Individuals continued to be the sole net buyers, purchasing a total of 180.9 billion KRW. Foreigners and institutions sold net amounts of 155.2 billion KRW and 21.4 billion KRW, respectively.
More sectors declined in the KOSDAQ market. The largest drops were in general electrical and electronics (-0.77%), distribution (-0.73%), medical and precision instruments (-0.72%), and publishing and media reproduction (-0.64%). Non-metallic minerals (4.57%), information devices (0.74%), and broadcasting services (0.71%) rose.
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