Concerns Over Tightening Persist... KOSPI and KOSDAQ Turn Lower Intraday

Concerns Over Fed's Aggressive Tightening Policy

Sell-offs Centered on Individual and Institutional Investors
Individual Investors' Desire for Liquidity Increases
Institutions Seek Arbitrage Due to Backwardation

Celltrion and Celltrion Healthcare Rise on 'Share Buybacks'

[Image source=Yonhap News]

[Asia Economy Reporter Minji Lee] The KOSPI and KOSDAQ indices, which had been rising on the back of a rebound in the Nasdaq index, turned downward during the trading session.

At 10:38 a.m. on the 11th, the KOSPI stood at 2,924.49, down 0.08% (2.23 points) from the previous trading day. The index opened at 2,930.93, up 0.14% (4.21 points) from the previous day, but soon turned downward. In the market, foreigners alone bought stocks worth 122.5 billion KRW, while individuals and institutions sold stocks worth 67.7 billion KRW and 57.2 billion KRW, respectively.

Since the release of the Federal Open Market Committee (FOMC) minutes in December last year, concerns that the Fed might pursue aggressive tightening policies have been reflected in the stock market. As selling and arbitrage trading desires increased among different market participants, the rise in the index was limited. Younghwan Kim, a researcher at NH Investment & Securities, explained, “Individuals are increasing their desire to hold cash in preparation for the LG Energy Solution IPO scheduled for the 18th-19th to subscribe to public offerings. Although the dividend arbitrage selling by institutional investors seems to have concluded, arbitrage trading due to the backwardation phenomenon in basis (the price difference between futures and spot) is ongoing.”

By sector, pharmaceuticals (1.74%), medical precision instruments (0.60%), and electrical and electronics (0.4%) showed upward trends. The rise of Celltrion (5.3%), which has started share buybacks, is believed to have lifted related sectors. Among the top market capitalization stocks, most showed gains. Samsung Electronics rose 0.38% to 78,300 KRW. Following were SK Hynix (1.61%), NAVER (1.19%), Samsung Biologics (0.48%), LG Chem (0.28%), Hyundai Motor (0.24%), Samsung SDI (0.64%), Kakao (0.10%), and Kia (0.24%).

At the same time, the KOSDAQ index stood at 969.37, down 1.12% (11.01 points) from the previous trading day. The KOSDAQ opened at 982.44, up 0.21% (2.06 points) from the previous day, but turned downward early in the session, showing a decline of over 1%. Regarding investment trends, individuals alone bought stocks worth 188.3 billion KRW, while foreigners and institutions sold stocks worth 155.9 billion KRW and 38.7 billion KRW, respectively.

Among the top market capitalization stocks, Celltrion Healthcare (7.11%), Celltrion Pharm (3.62%), and HL Biopharma (0.28%) rose, while EcoPro BM (-1.40%), Pearl Abyss (-1.55%), L&F (-0.64%), Kakao Games (-1.89%), and Wemade (-13%) declined.