Recovery of investment sentiment from China and pension fund buying... KOSPI breaks 3260

Pension Funds Net Buy Over 120 Billion KRW in Morning... Largest Since July Last Year

[Asia Economy Reporter Minwoo Lee] The KOSPI is extending its gains for the second consecutive day as foreign buying continues to flow in. This appears to be driven by improved investor sentiment following better-than-expected Chinese service sector indicators. Pension funds also supported the index by net buying over 120 billion KRW for the first time this year.

As of 11:12 a.m. on the 4th, the KOSPI stood at 3,262.73, up 0.79% from the previous day. After opening slightly higher at 3,246.65, the index has been gradually widening its gains.

Foreign investors have been steadily buying, with net purchases totaling 435.4 billion KRW following the previous day’s inflow. Institutional investors also net bought 85.9 billion KRW. Except for financial investment firms, which net sold 50.8 billion KRW, most institutions were net buyers. Notably, pension funds reversed a five-day streak of net selling to net buying, acquiring 121.2 billion KRW?the largest scale since July 13 last year, when they net bought 122.5 billion KRW. Meanwhile, individual investors sold off 522.7 billion KRW.

Sangyoung Seo, a researcher at Mirae Asset Securities, explained, "The Caixin China Services Purchasing Managers’ Index (PMI) was released at 54.9, significantly exceeding both last month’s figure of 50.3 and the forecast of 50.5, proving that growth in China’s service sector is accelerating. This acted as a positive factor for investor sentiment. Additionally, the tendency for the Chinese stock market to widen its gains due to these factors was also favorable. Attention should be paid this afternoon to whether the Chinese stock market’s gains expand further and to foreign investor flows."

Most sectors showed gains. The top performers were Transportation & Warehousing (1.70%), Machinery (1.15%), Electrical & Electronics (1.14%), and Textiles & Apparel (1.11%). Meanwhile, Medical Precision (-0.61%) and Telecommunications (-0.54%) declined.

Meanwhile, at the same time, the KOSDAQ also rose 0.73% from the previous day to 1,043.57, similarly widening its gains after a slightly higher opening.

On the KOSDAQ market, individual investors were the sole net buyers with 47.7 billion KRW, while foreigners and institutions net sold 0.2 billion KRW and 45.8 billion KRW, respectively.

Almost all sectors advanced. The Entertainment & Culture sector posted the largest gain at 4.46%, followed by Internet (3.78%), Broadcasting Services (3.54%), Telecommunications & Broadcasting Services (2.92%), Computer Services (2.59%), Publishing & Media Replication (2.03%), and Software (2.00%). On the other hand, Chemicals (-0.63%), Other Manufacturing (-0.55%), and Paper & Wood (-0.43%) declined.