'Where is the Bottom?' Anxiety Shrinks Investor Sentiment... KOSDAQ Falls Below 900 Intraday (Comprehensive)

KOSDAQ Index Falls Below 900 Intraday on 25th Before Recovering
KOSPI Also Drops Over 50 Points Intraday
Investor Sentiment Further Weakens Despite US Rebound

On the 25th, the KOSPI opened at 2,786.41, down 5.59 points (0.20%) from the previous trading day, at the Hana Bank dealing room in Jung-gu, Seoul. On the same day, the won-dollar exchange rate opened at 1,196.0 won, down 0.1 won from the previous trading day. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Ji Yeon-jin] The KOSDAQ index fell below the 900 mark during trading on the 25th. Ahead of the U.S. Federal Open Market Committee (FOMC) meeting starting that day, concerns over tightening intensified, leading to heavy selling by foreign investors, causing the index to drop below 900 for the first time in 10 months. The KOSPI index, which had fallen below the 2800 mark the previous day, also plunged more than 50 points in less than an hour.

The KOSDAQ index fell below 900 during the morning session. It was the first time in over 10 months since it recorded 890.17 on March 10 last year that the index traded below 900. The KOSDAQ had shown an upward trend fueled by massive liquidity due to the COVID-19 pandemic, reaching a record high of 1062.03 on August 6 last year. However, it faced corrections amid concerns over interest rate hikes due to global inflation, and the 'Cheonsdak' (1000-point level) broke early this year, with the 900 level threatened within 10 trading days. The index opened at 920.95, up 5.55 points (0.61%), but gave up gains early on and plummeted as individual investors switched to selling.

As of 10:30 a.m., the KOSDAQ index slightly reduced its losses to 905.65, down 1.07% (9.75 points) from the previous day, as institutional investors expanded their buying. At the same time, institutions were net buyers of 22.6 billion KRW to defend the index, while foreign investors sold off 10.9 billion KRW worth. Individual investors, who had shown buying momentum early in the session, were net sellers of about 12.2 billion KRW.

At this time, the KOSPI index was at 2746.47, down 45.53 points (1.63%). The index had plunged more than 2% during the session to 2731.23 but later narrowed the losses. Individual investors, who engaged in bargain hunting, were net buyers of 235.4 billion KRW, while foreign investors were net sellers of about 268.1 billion KRW. Institutions, which had been selling early in the session, were net sellers of about 9 billion KRW.

Among the top market capitalization stocks in the KOSPI, SK Hynix succeeded in rebounding during the session, rising 0.42%, while all others were in decline. In particular, LG Chem was plunging nearly 5% ahead of the Energy Solution's listing on the Korea Exchange on the 27th of this month, and KB Financial was down more than 4%. Samsung SDI was recording a drop of over 3%, and Samsung Biologics slightly reduced its losses to -2.47%.

Among the top market capitalization stocks in the KOSDAQ, Ecopro BM, which had sharply fallen recently due to a factory fire, rebounded by 2.35% after two days, and Kakao Games was also on the rise by 0.57%. WEMADE, which showed strength early in the session, was flat, while the rest of the stocks were all weak. In particular, Celltrion Healthcare and Celltrion Pharm were recording losses of over 4%.

Lee Jin-woo, head of the investment strategy team at Meritz Securities, said, "Although the U.S. reduced intraday losses yesterday, the perception of a bottom has not spread, and the trigger for a reversal remains unstable, so the losses could either widen or narrow. The index is moving based on supply and demand factors amid a contraction in risk appetite, but the fact that financial and cyclical stocks, which had held up well, are seeing larger losses indicates that investor sentiment has deteriorated further compared to yesterday."