KOSPI and KOSDAQ Widen Declines... Supply-Demand Instability Triggered by Large IPOs

[Image source=Yonhap News]

[Asia Economy Reporter Lee Seon-ae] On the 18th, the KOSPI, which started higher, showed a shaky trend as it experienced slight declines and rebounds before widening its losses in the afternoon.

As of 1:30 PM on the 4th, the KOSPI index is trading at 2861.87, down 0.98% from the previous day. The KOSDAQ index is at 944.98, down 1.35%.

In the KOSPI market, individuals are net buyers with 185.8 billion KRW, while foreigners and institutions are net sellers with 44.1 billion KRW and 145.1 billion KRW, respectively.

In the KOSDAQ market, individuals are net buyers with 96.6 billion KRW, whereas foreigners and institutions are net sellers with 99.0 billion KRW and 6.3 billion KRW, respectively.

The weak sectors in KOSPI are construction (-4.70%), machinery (-2.36%), and steel & metals (-1.95%), while the strong sectors are medical precision (+2.86%), telecommunications (+1.28%), and textiles & apparel (+0.30%). The weak sectors in KOSDAQ are metals (-2.41%), construction (-2.29%), and paper & wood (-2.18%).

Seosangyoung, a researcher at Mirae Asset Securities, stated, "Due to the inevitable supply-demand imbalance caused by LG Energy Solution's IPO, the Korean stock market has recently been reacting sensitively to some negative factors."

Han Ji-young, a researcher at Kiwoom Securities, also said, "The domestic stock market is expected to rebound, supported by improvements in Chinese industrial indicators and the rise in European stock markets, amid the perception that the recent sharp decline below the 2900 level was excessive. However, tightening policies and the LG Energy Solution IPO issue are expected to limit the index's upside."