KOSPI Falls Below 2800 After 13 Months... Growing Uncertainty

Domestic Stock Market Declines Ahead of US FOMC
KOSDAQ Also Falls Below 920 Level

[Image source=Yonhap News]

[Asia Economy Reporter Gong Byung-sun] The KOSPI fell below the 2800 mark for the first time in 13 months. Market uncertainty is increasing ahead of the U.S. Federal Open Market Committee (FOMC) meeting.

As of 10:45 a.m. on the 24th, the KOSPI recorded 2792.90, down 1.46% (41.39 points) from the previous day. It is the first time in about 13 months since December 24, 2020, that the KOSPI has fallen below 2800.

The U.S. tightening stance is interpreted as increasing uncertainty in the domestic stock market. Since the U.S. Federal Reserve (Fed) has shifted to a hawkish stance, the reduction of liquidity that had led to a stock market boom is inevitable. "Hawkish" refers to a tendency to prefer tight monetary policy in an overheating economy.

Labor Gil, a researcher at Shinhan Financial Investment, said, "Concerns about tightening are likely to continue to act as a negative factor for the stock market," and added, "In the short term, it is necessary to check the results of the FOMC and then confirm the volatility of the domestic stock market."

Sales by individuals and foreigners are strong. Individuals and foreigners sold a net 164 billion KRW and 240.3 billion KRW, respectively. Institutions bought a net 410.5 billion KRW.

Most sectors declined. The textile and apparel sector had the largest drop at 3.65%. This was followed by transportation and warehousing (-2.87%), steel and metals (-2.83%), chemicals (-2.53%), and transportation equipment (-2.48%). The food and beverage sector rose 2.03%.

All of the top 10 stocks by market capitalization fell. KB Financial had the largest drop at 3.65%, followed by LG Chem (-3.17%), Hyundai Motor (-2.00%), Samsung SDI (-1.75%), SK Hynix (-1.26%), Kia (-1.25%), Samsung Biologics (-0.98%), Kakao (-0.98%), Samsung Electronics (-0.93%), and NAVER (-0.90%).

At the same time, the KOSDAQ recorded 918.98, down 2.53% (23.87 points) from the previous day. The KOSDAQ started the day at 935.13, down 0.82% from the previous day, but the decline has deepened.

Foreigners' selling pressure led to the index decline. Foreigners sold a net 106.6 billion KRW. Individuals and institutions bought a net 106.3 billion KRW and 18.2 billion KRW, respectively.

All sectors declined. The digital content sector had the largest drop at 5.75%, followed by general electrical and electronics (-5.63%), IT software & services (-4.82%), entertainment & culture (-4.81%), and paper & wood (-4.36%).

Most of the top 10 stocks by market capitalization fell. Pearl Abyss had the largest drop at 9.30%, followed by EcoPro BM (-7.95%), Wemade (-5.84%), Kakao Games (-4.04%), HLB (-3.11%), Cheonbo (-1.93%), and L&F (-0.30%). Seegene (3.82%), Celltrion Healthcare (1.50%), and Celltrion Pharm (0.78%) rose.