KOSPI Starts Higher Then Turns Lower... Impact of Monetary Policy Committee and Options Expiration Day

On the 12th, as the KOSPI index started slightly lower due to selling pressure from foreigners and institutions, dealers were working in the dealing room of Hana Bank in Euljiro, Seoul. Photo by Moon Honam munonam@

[Asia Economy Reporter Hwang Junho] On the 14th, the stock market opened higher as the U.S. stock market closed higher the previous night amid growing expectations of an inflation peak-out. However, the market turned mixed due to the Bank of Korea's Monetary Policy Committee direction and the options expiration day.

As of 9:12 a.m., the KOSPI was at 2,715.37, down 1.12 points (0.04%) from the previous session. Individual investors continued to support the market with net purchases worth 75 billion KRW. However, foreign and institutional investors sold net amounts of 38.2 billion KRW and 37.8 billion KRW respectively, causing the index to decline.

Among all stocks, 549 rose while 241 declined. Among the top market cap stocks, Samsung Electronics, the perennial leader, widened its losses due to the previous day's 2.54% gain. At this time, Samsung Electronics is trading down 1.02% at 68,000 KRW. LG Energy Solution rose 0.46% to 433,000 KRW, while SK Hynix fell 0.88% to 112,000 KRW.

By sector, textiles and apparel (1.54%), transportation and warehousing (0.90%), and steel and metals (0.41%) sectors are trending upward, while telecommunications (-1.02%), medical precision (-0.87%), and electrical and electronics (-0.79%) sectors are extending losses.

On the 12th, as the KOSPI index started slightly lower due to selling pressure from foreigners and institutions, dealers were working in the Hana Bank dealing room in Euljiro, Seoul. Photo by Moon Honam munonam@

The KOSDAQ opened at 930.69, up 3.38 points (0.36%) from the previous day, maintaining its upward trend. At this time, the KOSDAQ is up 0.39% at 930.89. Individual investors are net buyers with 33.3 billion KRW, while foreign and institutional investors show net selling intentions of 29.4 billion KRW and 1 billion KRW respectively.

Among all stocks, 844 showed gains. Among the top market cap stocks, EcoPro BM, recently crowned the KOSDAQ leader, rose 1.23% to 470,100 KRW. Celltrion Healthcare, which lost the top spot to EcoPro BM, is down 0.49% at 61,400 KRW.

Two stocks hit the daily upper limit from early trading. East Asia Holdings recorded the upper limit price (482 KRW) again from the start of trading following the previous day. Organic T Cosmetic, which rose for two consecutive trading days, also hit the upper limit (308 KRW) during the session.

The USD/KRW exchange rate opened at 1,223.30, down 0.38% from the previous session.

The market is expected to show high volatility as the Bank of Korea's Monetary Policy Committee meeting coincides with the options expiration day. Seosang Young, a researcher at Mirae Asset Securities, said, "Despite high inflation levels, the U.S. stock market rose on expectations for the earnings season, which will positively affect investor sentiment in the Korean market. Especially, the surge in reopening-related stocks influenced by strong expected earnings in tech stocks and Delta Air Lines will also impact the strength of related domestic stocks."

However, Han Ji-young, a researcher at Kiwoom Securities, noted, "The Bank of Korea's Monetary Policy Committee and the options expiration day are variables that could increase intraday volatility due to supply and demand fluctuations." She added, "However, there is a consensus leaning toward a rate freeze at the Monetary Policy Committee meeting, and it is important to note that the supply-demand shock tends to be less severe on options expiration days compared to simultaneous futures and options expiration days."