'Nasdaq Futures Decline Impact' KOSPI Barely Holds at 2700, KOSDAQ Fails to Recover 900

[Image source=Yonhap News]

[Asia Economy Reporter Myunghwan Lee] On the 3rd, the first trading day after the Lunar New Year holiday, the KOSPI and KOSDAQ indices successfully rebounded and closed higher. This appears to be due to the global stock markets during the holiday easing concerns over the U.S. Federal Reserve's (Fed) tightening, recovering the previous declines. However, just before the market closed, the gains were partially reversed, with the KOSPI barely holding above the 2700 level. The KOSDAQ failed to recover the 900 level. The decline in Nasdaq futures limited the domestic market's gains.

On the 3rd, the KOSPI closed at 2707.82, up 1.67% (44.48 points) from the previous trading day. The KOSPI opened at 2706.34, up 1.61% (43.00 points) from the previous day, and at one point recovered to the 2730 level but fell below 2710 near the end of the session. Meta (formerly Facebook) plunged more than 20% in after-hours trading on the 2nd (local time), and as a result, Nasdaq futures also declined that day, causing the domestic market to give back some of its gains.

By investor type, individual investors sold 135.3 billion KRW, while foreigners and institutions bought 84.8 billion KRW and 50.6 billion KRW worth of shares, respectively.

Most of the top market capitalization stocks showed gains. LG Energy Solution closed at 477,000 KRW, up 0.95%. Other stocks such as SK Hynix (2.90%), NAVER (3.39%), Samsung Biologics (4.47%), LG Chem (5.95%), Hyundai Motor (1.06%), and Kakao (0.12%) also rose. Samsung Electronics and Samsung SDI closed at the same price as the previous day. By sector, medical precision (+23.42%), insurance (+4.67%), pharmaceuticals (+4.26%), and paper and wood (+3.87%) sectors rose.

The KOSDAQ market closed at 891.60, up 2.15% (18.73 points) from the previous day. The KOSDAQ opened at 887.85, up 1.72% (14.98 points) from the previous day. It rose to 898.37 in the morning, approaching the 900 level, but moved around the 890s in the afternoon before closing. Individual and foreign investors bought 47.6 billion KRW and 23.4 billion KRW, respectively, while institutions sold 69.0 billion KRW net.

Most of the top market capitalization stocks in KOSDAQ also rose. Celltrion Healthcare closed at 64,400 KRW, up 3.04%. EcoPro BM (3.26%), L&F (5.92%), Kakao Games (0.91%), HLB (2.21%), Celltrion Pharm (5.57%), and CJ ENM (4.31%) also closed higher. In particular, Seegene closed at 63,300 KRW, up 16.36%, as diagnostic kit stocks strengthened due to increased demand for diagnostic kits. On the other hand, Pearl Abyss (-1.80%) and Wemade (-0.17%) closed lower. By sector, broadcasting services (+6.16%), telecommunications and broadcasting services (+5.34%), pharmaceuticals (+5.26%), and textiles and apparel (+4.09%) rose.

Lee Kyung-min, a researcher at Daishin Securities, said, "The burden of monetary policy, which was one of the causes of the sharp drop in January, eased during the holiday period, improving investor sentiment." However, he explained, "This rebound is not based on fundamentals but is a normalization process following an overreaction after the January Federal Open Market Committee (FOMC) meeting amid recognition of excessive declines." He added, "In February, economic indicators are inevitably expected to be weak due to a surge in COVID-19 cases, and with the monetary policy burden still present, economic uncertainty may increase. Therefore, it is necessary to keep in mind the possibility of another level-down after the technical rebound."