KOSPI, Stuck in Uncertainty... Recovery to 2700 Level

Aftermath of Russia-Ukraine Conflict
Fundamentals Shaken by Rising Oil Prices
KOSPI Fluctuates Around 2700 Level

[Image source=Yonhap News]

[Asia Economy Reporter Junho Hwang] On the afternoon of the 14th, the stock market showed signs of narrowing losses but continued to weaken as it failed to overcome various negative factors.

As of 2:01 p.m. on the day, the KOSPI was at 2712.14, down 1.29% from the previous session. Individuals and institutions sold net amounts of 26.2 billion KRW and 129.4 billion KRW respectively, increasing downward pressure on the index. However, institutions showed a net buying intention of 127.9 billion KRW, preventing further declines. In the morning, the rise in the won-dollar exchange rate raised expectations for foreign inflows, but the market turned weak in the afternoon, making this difficult. At this time, the won-dollar exchange rate is 1197.90, down 0.05% from the previous session.

Among all stocks, 141 stocks rose. Although the number of rising stocks increased compared to the morning, the gains were not significant. Among the top market capitalization stocks, only Samsung Biologics showed an upward trend, as in the morning. It rose 1.59% to 766,000 KRW, with a slightly larger gain. This appears to be due to increased expectations for a ripple effect following news that the U.S. government added 33 companies, including Wuxi Biologics listed on the Hong Kong stock exchange, to the unverified list.

Accordingly, the pharmaceutical sector (0.84%) was the only sector showing an upward trend in the market that day. Besides Samsung Biologics, Ildong Pharmaceutical rose 4.25%, SK Bioscience 2.88%, and Ilseong Pharmaceutical 2.79%, maintaining their gains.

On the other hand, Samsung Electronics, the perennial market leader, fell 1.74% to 73,600 KRW, and LG Energy Solution dropped 0.41% to 480,000 KRW. NAVER and Kakao declined 1.37% and 3.05% respectively, while Hyundai Motor and Samsung SDI also showed declines in the 3% range.

The sector with the largest decline was machinery, down 4.04%. In particular, Doosan Heavy Industries is leading the sector's decline, plunging 9.51% at this time. Doosan Heavy Industries showed a sharp decline due to the government's acceleration of nuclear phase-out and under-subscription in its rights offering. The subscription rate for Doosan Heavy Industries' rights offering, which ended on the 11th, was 97.44%. Due to under-subscription, about 2.12 million unsubscribed shares will be allocated to existing shareholders.

On the 14th, dealers are working in the dealing room of Hana Bank in Euljiro, Seoul. On this day, the KOSPI index opened at 2715.10, down 32.61 points (1.19%) from the previous trading day. Photo by Moon Honam munonam@

The KOSDAQ continues to fall in the 2% range, similar to the morning session, down 2.26% to 857.59. While individuals realized profits worth 49.3 billion KRW, foreigners and institutions are net buying 36.9 billion KRW and 15 billion KRW respectively.

Among all stocks, 134 stocks are showing gains. Among the top market capitalization stocks, pharmaceutical stocks such as Celltrion Healthcare (1.26%) and Celltrion Pharm (1.17%) stand out with their upward trends. Following them, Pearl Abyss (2.35%), L&F (0.06%), and CJ ENM (0.08%) are also showing upward curves.

The biggest cause of the market weakness that day is cited as geopolitical uncertainty. Lee Kyung-min, a researcher at Daishin Securities, analyzed, "In a situation where the burden of monetary policy has intensified, the escalation of geopolitical risks surrounding the Ukraine crisis and fundamental uncertainties have overlapped, leading to a contraction in investor sentiment."

He added, "Due to the escalation of geopolitical risks, the current crude oil futures (94.47) are approaching $95, raising concerns about increased inflationary pressure. On the surface, the Ukraine crisis acted as a factor dampening investor sentiment, but fundamentally, uncertainties also exist beneath the surface," he concluded.