KOSPI Holding the 3000 Level... Individuals Solely Driving the Index

[Image source=Yonhap News]

[Asia Economy Reporter Lee Seon-ae] The KOSPI index is holding above the 3000 level, showing a slight decline.

On the 18th, the KOSPI index opened at 3017.48, up 2.42 points (0.08%). The KOSDAQ index started at 992.57, up 2.03 points (0.20%). It then immediately turned downward, falling below the 3000 and 990 levels, but the decline is narrowing again. As of 11:20 AM, the KOSPI is down 0.10% at 3012.10, while the KOSDAQ is up 0.64% at 996.87.

Only individual investors are net buyers, while foreigners and institutions are both selling. Individuals are net buying 464.5 billion KRW and 126.4 billion KRW in the KOSPI and KOSDAQ markets, respectively. Meanwhile, foreigners have switched to net buying 3.1 billion KRW in the KOSPI market but remain net sellers with 83.5 billion KRW in the KOSDAQ market. Institutions are net selling 476.5 billion KRW and 26.4 billion KRW in the two markets, respectively.

Most KOSPI sectors are declining. Transportation and warehousing (-1.71%), telecommunications (-1.43%), textiles and apparel (-1.30%), pharmaceuticals (-1.03%), distribution (-0.78%), non-metallic minerals (-0.70%), and machinery (-0.63%) are all down. Only a few sectors such as services (0.80%), medical precision (0.73%), banking (0.24%), and food and beverage (0.23%) are rising. In the KOSDAQ sectors, entertainment and culture and general electric electronics are up more than 2%. Digital content, textiles and apparel, IT software and services, IT components, IT comprehensive, IT hardware, telecommunications equipment, chemicals, software, and publishing and media replication are also rising in order. Conversely, transportation, other manufacturing, metals, internet, non-metallic, finance, information devices, and transportation equipment and parts are declining.

Seo Sang-young, a researcher at Mirae Asset Securities, said, "The U.S. stock market's rise due to solid retail sales, favorable earnings reports, and expanded efforts to pass infrastructure investment legislation is positive for the Korean stock market. However, retail sales excluding the energy sector have not shown a clear increase, and economic indicators such as consumer sentiment are weak, which is a burden." He added, "In particular, the Atlanta Federal Reserve Bank president has continuously lowered the forecast for U.S. GDP growth in the third quarter to 1.2%, reflecting ongoing concerns about economic slowdown, which is also a burden."

He continued, "Considering this, the Korean stock market is expected to start slightly higher but with a high possibility of profit-taking. If China's real economy indicators released during the trading session show significant slowdown, it could further stimulate expectations for a rate cut by the People's Bank of China, so the Korean stock market will be influenced by changes in the Chinese stock market based on Chinese indicators." He emphasized the need to pay attention to the expected slowdown in China's third-quarter GDP growth rate, industrial production, and fixed asset investment compared to the previous month.

Meanwhile, on the 15th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 35,294.76, up 382.20 points (1.09%) from the previous session. The Standard & Poor's (S&P) 500 index rose 33.11 points (0.75%) to 4,471.37, and the tech-heavy Nasdaq index closed at 14,897.34, up 73.91 points (0.5%) from the previous session.