KOSPI Closes Lower as Institutional Investors Turn Net Sellers... 2700 Level 'At Risk'

FOMC Caution Continues
Increased Trading Volatility in LG Energy Solution

Ecopro BM Plummets 19% Amid Insider Trading Investigation News

On the 26th, dealers were working in the dealing room of Hana Bank in Euljiro, Seoul. On that day, the KOSPI index opened at 2,929.75, up 9.36 points (0.34%) from the previous session. The won-dollar exchange rate started at 1,196.9 won, down 1.7 won. Photo by Moon Honam munonam@

[Asia Economy Reporter Minji Lee] The KOSPI and KOSDAQ indices closed lower. Although there was a rebound buying in the early session, concerns over the FOMC (Federal Open Market Committee) persisted, and volatility in supply and demand ahead of LG Energy Solution's listing is estimated to have limited the rebound.

On the 26th, the KOSPI closed at 2709.24, down 0.41% (11.15 points) from the previous trading day. The KOSPI opened at 2729.75, up 0.34% (9.36 points) from the previous day, fluctuating between 2720 and 2730, but soon turned to a net sell-off by institutions and closed lower. Looking at investor trends, foreigners and institutions sold stocks worth 244 billion KRW and 17.9 billion KRW respectively, while individuals alone bought stocks worth 226.3 billion KRW.

By sector, the largest gains were seen in Medical Precision (1.86%), Transportation and Warehousing (1.63%), Securities (1.38%), and Insurance (1.14%). Among transportation and warehousing, Korean Air rose 3.6% intraday on expectations of record earnings. Among the top market capitalization stocks, Samsung Electronics (-0.95%), SK Hynix (-0.42%), NAVER (-2.8%), Samsung Biologics (-2.95%), Samsung SDI (-1.4%), Hyundai Motor (-2.31%), and Kakao (-0.8%) declined, while LG Chem (3.27%) and Kia (1.57%) rose.

Seokhwan Kim, a researcher at Mirae Asset Securities, said, "Volatility in supply and demand ahead of LG Energy Solution's listing limited the rebound, and concerns over the FOMC persisted. By sector, the transportation and warehousing sector is expected to see earnings growth due to the logistics crisis, and expectations for increased domestic flights during the Lunar New Year holiday were also reflected."

The KOSDAQ index closed at 882.09, down 0.83% (7.35 points). The index opened at 892.01, up 0.29% (2.57 points) from the previous day. The index fluctuated between gains and losses during the session but closed lower as individuals increased their net selling. Looking at investor trends, foreigners and institutions were net buyers of 54.9 billion KRW and 83.2 billion KRW respectively, while individuals were net sellers of 151.6 billion KRW alone.

Among the top market capitalization stocks, L&F (2.09%), Kakao Games (2.02%), and Wemade (8.46%) rose, while Celltrion Healthcare (-1.4%), EcoPro BM (-19.15%), Celltrion Pharm (-1.86%), and Seegene (-5.87%) declined. EcoPro BM fell sharply in the afternoon following news that it is under prosecution investigation for insider trading. The main allegation is that key executives used insider information to trade stocks before the announcement of a long-term supply contract worth 2.7412 trillion KRW signed between SK Innovation and EcoPro BM on February 3, 2020.