Both KOSPI and KOSDAQ Start Weak... Impact of US Stock Market Decline

[Image source=Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] The domestic stock market, which started mixed, is showing a widespread decline. It appears that the domestic market has been affected by the drop in the U.S. stock market and the possibility of an interest rate hike by the U.S. Federal Reserve (Fed).

As of 10 a.m. on the 14th, the KOSPI stood at 2,656.26, down 0.19% (5.02 points) from the previous trading day. The KOSPI opened at 2,654.93, down 0.24% (6.35 points) from the previous day.

The domestic market is interpreted to have been influenced by the U.S. announcing additional sanctions against Russia, which led to a decline in the U.S. stock market. On the 11th (local time), the Dow Jones Industrial Average closed at 32,944.19, down 229.88 points (0.69%) from the previous day. The S&P 500 index fell 55.21 points (1.30%) to 4,204.31, and the tech-heavy Nasdaq index dropped 286.15 points (2.18%) to 12,843.81. The additional sanctions include revoking Russia's Most Favored Nation status under the Permanent Normal Trade Relations (PNTR) framework, in coordination with the Group of Seven (G7) and North Atlantic Treaty Organization (NATO) member countries.

Furthermore, the near-certainty of a 0.25 percentage point interest rate hike at this week's Federal Open Market Committee (FOMC) meeting is also seen as increasing market volatility. Han Ji-young, a researcher at Kiwoom Securities, said, "With few positive factors emerging for the stock market, volatility is expected to increase during the week due to caution ahead of the March FOMC."

At the same time, investor trends show foreigners and institutions sold 231.1 billion KRW and 2.1 billion KRW respectively, while individuals bought 232.6 billion KRW.

Top market capitalization stocks showed mixed movements. Samsung Electronics traded at 70,200 KRW, up 0.29% from the previous day. LG Energy Solution (-5.88%), SK Hynix (-0.43%), Naver (1.06%), Samsung Biologics (-0.25%), Kakao (2.46%), Hyundai Motor (-2.37%), LG Chem (-1.17%), Samsung SDI (-3.33%), Kia (-1.57%), and Celltrion (5.78%) were recorded.

As of 10:10 a.m., by sector, declines were seen in textiles and apparel (-5.11%), transportation equipment (-1.55%), non-metallic minerals (-1.47%), chemicals (-1.05%), and electrical and electronics (-1.03%). In contrast, iron and metals (2.26%), telecommunications (1.78%), banking (1.37%), pharmaceuticals (0.99%), transportation and warehousing (0.86%), and insurance (0.65%) showed gains.

As of 10 a.m., the KOSDAQ index was trading at 883.36, down 0.94% (8.35 points) from the previous day. The KOSDAQ opened at 893.18, down 0.16% (1.47 points) from the previous day.

Investor trends show individuals net bought 200.8 billion KRW, while foreigners and institutions net sold 174.8 billion KRW and 20.3 billion KRW respectively.