Samsung Electronics Hits New Low Ahead of US Consumer Price Index Release
Inflation Concerns Grow, Leading to Consecutive Declines
On the 12th, the KOSPI index started slightly lower due to selling pressure from foreigners and institutions. Dealers are working in the Hana Bank dealing room in Euljiro, Seoul. Photo by Mun Ho-nam munonam@
[Asia Economy Reporter Hwang Junho] On the 12th, the KOSPI closed lower ahead of the U.S. inflation data release. Investor sentiment was dampened as major developed countries' government bond yields surged the previous day, and concerns grew over inflation data reflecting the impact of the Russia-Ukraine war for the first time, expanding caution among investors.
On the day, the KOSPI closed at 2,666.76, down 26.34 points (0.98%). The index opened at 2,674.17, down 18.93 points (0.70%), maintaining a decline of less than 1% in the morning, but after 11 a.m., the decline exceeded 1%. In the afternoon, the drop narrowed to within 1% before closing.
Individual investors engaged in bargain hunting during the session, marking their ninth consecutive day of net buying. They purchased a net amount of 562.7 billion KRW, supporting the market. However, foreign investors and institutions sold net amounts of 467 billion KRW and 122 billion KRW respectively, pulling the market down.
Among all stocks, 643 declined. Large-cap stocks also closed mostly lower. Samsung Electronics, the unchanging market leader, hit a new 52-week low again. It closed at 67,000 KRW, down 1.33% from the previous session, reaffirming its bottom. Despite individual investors' net buying, foreign and institutional selling dragged the price down. LG Energy Solution recorded the largest decline among the top 10 by market capitalization, closing at 411,000 KRW, down 3.29%. Following were Samsung Electronics Preferred Shares (-2.26%), Kakao (-1.05%), and Samsung SDI (-1.37%), all with significant declines.
By sector, the medical precision industry (1.59%) and transportation and warehousing industry (0.20%) showed modest gains, but the increases were not large. Among individual stocks, Mason Capital, a subsidiary of KG Group and a rival bidder for Ssangyong Motor, hit the daily upper limit after news broke that KB Financial Group withdrew its funding for Ssangbangwool Group’s acquisition bid.
The KOSDAQ also closed lower, mirroring the KOSPI. It ended the day at 913.82, down 8.01 points (0.87%). Individual investors bought a net 110.7 billion KRW, but foreign and institutional investors sold net amounts of 16.4 billion KRW and 87.7 billion KRW respectively, leading to the decline. The KOSDAQ faced a risk of falling below the 900-point level but recovered some losses in the afternoon.
The stock prices of top market cap companies showed stark contrasts. L&F (0.96%) and Pearl Abyss (2.86%) rose amid the down market, while Wemade (11.64%) and Kakao Games (8.25%) plunged sharply.
Hanjaehwan, a researcher at Hana Financial Investment, said, "Ahead of the U.S. Consumer Price Index (CPI) announcement, the domestic market closed lower due to the previous day’s rise in government bond yields and news of Shanghai lockdown in China. The news of the first domestic infection of the Omicron recombinant variant ‘XL’ also weighed on investor sentiment, but intraday rebounds in Taiwan and China helped reduce the KOSPI’s decline."
Kim Seokhwan, a researcher at Mirae Asset Securities, also noted, "The U.S. stock market fell due to continued selling pressure on tech stocks following the surge in government bond yields, leading to declines in major domestic markets. Concerns over global economic slowdown and ongoing U.S. inflation issues persist. The five consecutive days of foreign selling is a burden on the index."
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