Individual Investors Net Buy 1 Trillion KRW on KOSPI
[Asia Economy Reporter Ji Yeon-jin] On the 6th, the domestic stock market closed lower due to renewed concerns over U.S. monetary tightening, with foreign and institutional investors selling simultaneously. However, individual investors prevented a wider decline by net buying over 1 trillion won in the KOSPI market. In the KOSDAQ market, secondary battery stocks showed strength, with Ecopro BM pushing Celltrion Healthcare out to become the largest by market capitalization.
The KOSPI index closed at 2,735.03, down 24.41 points (0.88%) from the previous day. The index showed weakness from the opening, influenced by the previous day’s decline in the U.S. stock market following strong tightening remarks by Lael Brainard, the dovish Vice Chair of the Federal Reserve (Fed).
Vice Chair Brainard stated, "Balance sheet reduction will proceed at a rapid pace starting as early as May," which raised concerns in the stock market that the Fed’s tightening policy would accelerate, dampening investor sentiment.
Lee Kyung-min, head of investment strategy at Daishin Securities, said, "Recent global economic indicators have been weak, and the rise in the won-dollar exchange rate has led to selling by institutions and foreigners. As Fed officials’ recent remarks have been stronger than market expectations, investors’ concerns are deepening, and this atmosphere is expected to continue for the time being."
Although foreign and institutional investors sold heavily during the day, individual investors absorbed the selling, limiting further declines.
On this day, individuals net bought 1.1351 trillion won in the KOSPI market. Foreigners and institutions net sold approximately 584.8 billion won and 565.1 billion won, respectively.
Foreign selling was concentrated on large-cap stocks in the KOSDAQ market. Samsung Electronics closed down over 1% at 68,500 won ahead of its earnings announcement on the 7th. SK Hynix also closed down 3%, while Naver and Kakao fell 3.65% and 2.33%, respectively.
Conversely, Hyundai Motor (0.56%) and Kia (3.52%), which showed weakness during the day, rebounded on expectations of improved earnings, and Samsung Biologics closed flat.
By sector, insurance, considered a beneficiary of strong U.S. tightening, rose 2.16%, while transportation equipment (1.08%) and telecommunications (0.42%) also gained. On the other hand, electrical and electronics (-1.20%), services (-1.90%), chemicals (-1.36%), and banks (-1.80%) were weak.
The KOSDAQ index also closed lower at 943.13, down 9.34 points (0.98%). Individuals net bought about 295.9 billion won, while foreigners and institutions net sold 102.5 billion won and 181.2 billion won, respectively.
On this day, the top market capitalization ranking in the KOSDAQ changed again. Celltrion Healthcare, the KOSDAQ leader, continued its recent weakness and fell over 3%, ceding the top spot to Ecopro BM, which closed up 2.15%. Secondary battery parts company L&F rose 0.30%, and Wemade jumped 1.99%. All other stocks declined.
In the KOSDAQ market, 1,004 stocks fell, while 396 stocks rose. KG Chemical and AT Semicon closed at their upper price limits, while Haink Korea, Skin&Skin, and Shinsong Holdings hit intraday upper limits before falling.
Han Ji-young, a researcher at Kiwoom Securities, said, "The domestic stock market is showing stagnant price movement due to the sharp drop in the U.S. Nasdaq and caution over the March FOMC minutes. However, compared to the U.S. market, the domestic market has shown limited downside pressure overall since mid-March, as its price recovery has not been as strong."
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