The Quiet KOSPI... Closes at 3260 Level with Reduced Losses

Powell, Chair of the US Federal Reserve, Maintains Wait-and-See Stance Ahead of Congressional Speech

On the afternoon of the 14th, the KOSPI index is displayed in the Hana Bank dealing room in Jung-gu, Seoul.
[Image source=Yonhap News]

[Asia Economy Reporter Minwoo Lee] The KOSPI closed in the 3260 range with little change. Market participants appeared somewhat cautious ahead of Federal Reserve (Fed) Chair Jerome Powell's congressional testimony.

On the 14th, the KOSPI closed at 3264.81, down 0.20% (6.57 points) from the previous day. After opening slightly lower at 3270.09, it declined further, fluctuating between 3250 and 3260, and ended the session with minimal volatility.

Foreign investors and institutions, who had shown net buying for two consecutive days, turned to net selling. They sold 273.1 billion KRW and 314.6 billion KRW worth of shares, respectively. Meanwhile, individual investors were net buyers, purchasing 604.8 billion KRW worth of shares.

Many sectors declined. The largest drops were seen in Medical Precision (-1.46%), Banking (-1.44%), Transportation and Warehousing (-1.33%), and Securities (-1.20%). On the other hand, Retail (1.13%), Non-metallic Minerals (0.72%), and Steel & Metals (0.59%) sectors rose.

Among the top 10 market capitalization stocks, NAVER (0.68%), Kakao (0.62%), LG Chem (0.48%), and SK Hynix (0.41%) increased. Celltrion (-0.76%), Samsung SDI (-0.67%), Samsung Electronics (-0.38%), Kia (-0.34%), and Samsung Biologics (-0.12%) declined. Hyundai Motor closed at the same price as the previous day.

The KOSDAQ closed at 1044.98, up 0.16% (1.67 points) from the previous day. After opening slightly higher at 1043.50, it briefly turned downward, but the decline was limited. The day's low was 1038.68.

Unlike the KOSPI market, foreign investors and individuals were net buyers of 23.1 billion KRW and 70.8 billion KRW, respectively. Only institutions were net sellers, offloading 70.8 billion KRW worth of shares.

The ratio of rising to falling sectors was similar. General Electric & Electronics (2.18%), IT Components (1.50%), Information Devices (1.30%), and Food & Tobacco (1.25%) rose, while Broadcasting Services (-1.71%), Publishing & Media Replication (-1.54%), and Telecommunications & Broadcasting Services (-1.36%) fell.

Most of the top market cap stocks declined. Celltrion Pharm's drop of -3.59% was the largest. Following were CJ ENM (-2.78%), Kakao Games (-2.29%), Alteogen (-2.11%), Celltrion Healthcare (-1.43%), SK Materials (-0.95%), and HLB (-0.14%). Only EcoPro BM (5.84%) and Seegene (2.39%) rose.

Although the U.S. stock market decline overnight dampened investor sentiment, the cautious stance is interpreted as investors waiting ahead of Chair Powell's congressional testimony. Ji-young Han, a researcher at Kiwoom Securities, explained, "Expectations for the earnings season are still effective, and there is a mood to wait and see how Chair Powell will address inflation concerns."

Despite the overnight decline in the U.S. stock market weighing on investor sentiment, the cautious stance continued ahead of Chair Powell's congressional testimony. Ji-young Han of Kiwoom Securities said, "There is still anticipation for the Q2 earnings season, and the market is adopting a wait-and-see attitude regarding how Chair Powell will comment on inflation concerns."

Meanwhile, Chair Powell is scheduled to appear before the U.S. House Financial Services Committee and the Senate Banking Committee on the 14th and 15th (local time), respectively, for the semiannual monetary policy hearings. Attention is focused on whether he will make different remarks on the U.S. economic outlook or tapering (reduction of asset purchases) compared to last month's Federal Open Market Committee (FOMC) meeting.