Stock Market Turns Pale Over 'US Inflation Fear'... KOSDAQ Drops 2%

On the 11th, the KOSPI index and exchange rate were displayed on the electronic board in the dealing room of Hana Bank in Euljiro, Seoul. On that day, the KOSPI opened at 2,739.14, down 32.79 points (1.18%) from the previous session, and the KOSDAQ opened at 885.31, down 10.37 points (1.16%). The exchange rate opened at 1,201 won, up 4.5 won, following the announcement of the US January Consumer Price Index (CPI). Photo by Moon Honam munonam@

[Asia Economy Reporter Ji Yeon-jin] On the 11th, the domestic stock market failed to overcome the wall of the highest inflation in 40 years in the United States. The KOSPI index reduced its intraday losses due to simultaneous buying by foreign and individual investors, but expanded institutional selling just before the market closed, ultimately ending lower. The KOSDAQ market fell sharply as the Nasdaq index plunged due to concerns over tightening triggered by the previous day's surge in U.S. inflation, dampening investor sentiment.

The KOSPI index closed at 2,747.71, down 24.22 points (0.87%) from the previous day. The index started the day down more than 1% following news that the U.S. Consumer Price Index (CPI) for January hit 7.5%, the highest since 1882. In the afternoon, the loss narrowed to -0.4%, but the scale of net selling by institutions expanded. Meanwhile, individual investors, who switched to net buying in the early session, gradually reduced their buying momentum. Institutions led the KOSPI's weakness by net selling 463.3 billion KRW. Foreign investors supported the index with net purchases worth 375.4 billion KRW, and individuals bought 71.7 billion KRW.

Kakao surged more than 5% in the afternoon after announcing shareholder return policies including share buybacks the previous day, closing up 4.58%. SK Hynix, which saw concentrated foreign buying, rose 1.54%, and LG Energy Solution (1.05%) rebounded after four days. Samsung Electronics (-0.66%), NAVER (-2.11%), Samsung Biologics (-2.85%), LG Chem (-4.24%), and Samsung SDI (-3.87%) among other top KOSPI market cap stocks recorded losses.

Inflation-defensive stocks showed an upward trend amid concerns over U.S. inflation data. Steel stocks, including POSCO (3.04%), showed strength. Among financial stocks, Hana Financial Group jumped 5.14% as it was analyzed to be undervalued.

The KOSDAQ index retreated 18.26 points (2.04%) to 877.42. Although individual investors defended the index with net purchases worth 228.5 billion KRW,

foreign and institutional investors net sold 120.3 billion KRW and 125.4 billion KRW respectively, causing a significant drop in the index.

Except for EcoPro BM (4.39%) and Kakao Games (1.29%), which reported strong earnings, most of the top market cap stocks declined. In particular, Wemade plunged 10.13% following a limit-down the previous day. L&F (-5.06%) and CJ ENM (-5.14%) also showed steep declines.

Elsewhere, Taeyang Metal hit the upper price limit on news of supplying Tesla, while AD Chips and Leaders Cosmetics fell to their price limits due to warnings of being designated as management stocks.

Kim Seok-hwan, a researcher at Mirae Asset Securities, said, "The sharp rise in U.S. consumer prices led to a surge in government bond yields and concerns over the intensity of interest rate hikes." He added, "The Nasdaq's larger decline due to the surge in U.S. bond yields also weighed on the KOSDAQ index."