KOSPI Turns to Rise in the Afternoon... Trading Around 3160 Level

Foreigners Turn Net Buyers
Stock Market Boosted by Expectations of Chinese Stimulus Measures

[Image source=Yonhap News]

[Asia Economy Reporter Minji Lee] The KOSPI is gaining momentum in the afternoon, driven by net buying from foreign investors.

As of 1:28 PM on the 15th, the KOSPI stood at 3,161.63, up 0.42% (12.80 points) from the previous trading day. The index opened at 3,147.21, down 0.05% (1.62 points) from the previous day, and showed an upward trend but fell to 3,138.80 during the session following the release of China's real economy indicators. However, expectations for the Chinese government's stimulus policies helped the domestic stock market turn upward.

The main driver of the market currently is foreign investors. Individuals, who had been net buyers until the morning, switched to net sellers, offloading stocks worth 19.9 billion KRW, while institutions are net selling stocks worth 166.4 billion KRW. Foreign investors alone purchased stocks worth 174.9 billion KRW.

According to the real economy indicators released in the morning from China, growth was only 2.5% year-on-year, falling short of market expectations of 6.9%. Consumption excluding automobiles rose slightly by 3.6% year-on-year, but the increase was limited due to significant declines in household electrical appliances (5%) and communication devices (14.9%). Retail sales are believed to have been sluggish due to COVID-19. Industrial production also rose 5.3% year-on-year, below the expected 5.8%. The automobile manufacturing sector plummeted by 12.6%, and steel-related sectors such as raw steel (10.1%) and crude steel (13.2%) saw declines, which had a significant impact.

Sangyoung Seo, a researcher at Mirae Asset Securities, explained, "Since this is a result of COVID-19, the impact of the slowdown in Chinese consumption and industrial production appears to be limited," adding, "Rather, expectations for economic stimulus from China have led to a turnaround and rise in both the Chinese and Korean stock markets."

Among the top market capitalization stocks, Samsung Electronics (0.91%), Samsung Biologics (2.30%), Kakao (0.4%), Hyundai Motor (0.48%), and Celltrion (3.61%) rose, while SK Hynix (-0.47%), NAVER (-0.12%), Samsung SDI (-0.13%), and LG Chem (-2.86%) declined.

At the same time, the KOSDAQ index stood at 1,043.47, up 0.55% (5.73 points) from the previous trading day. The KOSDAQ opened at 1,039.57, up 0.18% (1.83 points). In terms of investment trends, individuals alone purchased stocks worth 81.8 billion KRW, while foreign investors and institutions sold stocks worth 30 billion KRW and 39.9 billion KRW, respectively.

All of the top market capitalization stocks are showing upward trends. Celltrion Healthcare (2.25%) and Celltrion Pharm (3.30%) are rising ahead of the merger between Celltrion Healthcare Holdings and Celltrion Skin Cure. This is analyzed as reflecting expectations that the simplification of corporate governance will allow them to escape regulations on internal transactions. Other stocks showing gains include EcoPro BM (2.17%), HL Biopharma (2.95%), Pearl Abyss (0.12%), Kakao Games (0.55%), L&F (0.65%), and SK Materials (2.63%).