Both KOSPI and KOSDAQ Show Over 1% Decline
Foreign Investors' Supply-Demand Issues Materialize... Sold 1.3975 Trillion Won in Futures Market
[Asia Economy Reporter Gong Byung-sun] Regulatory burdens originating from China and the expiration of the US federal government's debt ceiling suspension period have impacted the domestic stock market. Both the KOSPI and KOSDAQ indices showed declines of over 1%.
On the 30th, the KOSPI closed at 3,202.32, down 1.24% (40.33 points) from the previous trading day. The KOSPI started the day lower, widened its losses during the session, but barely held above the 3,200 level.
The regulatory impact from the Chinese government continues. Due to these regulations, there is an increased possibility of foreign capital withdrawing from emerging market stocks. Recently, the Chinese government has been regulating platform companies such as Tencent and Didi Chuxing, as well as the private education market. This has raised market concerns that regulations could expand to other key Chinese industries such as technology and real estate. KB Securities researcher Ha In-hwan explained, “Considering the Chinese government's intention to strengthen control over the market economy, it is difficult for investors to quickly regain trust in the Chinese financial market,” adding, “The foreign selling and futures selling on this day reflect this sentiment.” On this day, foreigners net sold 1.3975 trillion KRW in the domestic futures market.
The expiration of the US federal government's debt ceiling suspension period is another burden. The suspension period for the debt ceiling limit ends on the 31st, and Mitch McConnell, the Republican Senate Majority Leader, declared that Republican lawmakers would oppose not only President Joe Biden's fiscal spending plan but also any expansion of the debt ceiling. Since Congress is in recess until September, it will be difficult to raise the limit in August as well. Researcher Ha said, “The end of the debt ceiling suspension period is likely to act as a short-term issue for the domestic stock market.”
Despite individual investors' buying exceeding 1 trillion KRW, the index fell. On this day, foreigners and institutions net sold 717.9 billion KRW and 574.9 billion KRW, respectively. Individuals net bought 1.2581 trillion KRW.
Almost all sectors declined. The telecommunications sector had the largest drop at 2.65%. This was followed by pharmaceuticals (-2.14%), transportation equipment (-2.08%), transportation and warehousing (-1.80%), and paper and wood (-1.70%). Steel and metals (1.54%) and medical precision instruments (0.19%) rose.
All of the top 10 market capitalization stocks except LG Chem declined. Samsung SDI had the largest drop at 3.14%, followed by Kia (-3.13%), Celltrion (-3.06%), Samsung Biologics (-2.31%), Hyundai Motor (-1.80%), NAVER (-1.37%), SK Hynix (-1.32%), Kakao (-1.01%), and Samsung Electronics (-0.63%). LG Chem rose 0.84%.
The KOSDAQ closed at 1,031.14, down 1.24% (12.99 points) from the previous trading day. It even fell to 1,029.19 at 2:43 PM.
Foreigners and institutions showed strong selling pressure. Foreigners and institutions net sold 124 billion KRW and 124.2 billion KRW, respectively. Individuals net bought 258.4 billion KRW.
Most sectors declined. Digital content had the largest drop at 3.50%, followed by entertainment and culture (-2.45%), publishing and media replication (-2.19%), distribution (-2.18%), and IT software & services (-2.14%). Telecommunications services (0.34%), general electrical and electronics (0.28%), and medical and precision instruments (0.15%) sectors rose.
Almost all of the top 10 market capitalization stocks showed weakness. Pearl Abyss had the largest drop at 5.61%, followed by Kakao Games (-4.81%), Alteogen (-3.26%), Celltrion Healthcare (-3.24%), Celltrion Pharm (-3.20%), Seegene (-2.78%), CJ ENM (-2.04%), and SK Materials (-0.80%). EcoPro BM (1.79%) and HLB (0.70%) rose.
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