KOSPI and KOSDAQ Fall in Afternoon... Cautious Stance Ahead of FOMC Results

Foreigners Net Sell 412.2 Billion KRW in Gift Market
Foreigners 'Buy' in KOSPI Spot Market

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Hwang Yoon-joo] On the afternoon of the 4th, both the KOSPI and KOSDAQ turned downward. Ahead of the Federal Open Market Committee (FOMC) regular meeting results to be released in the early hours of the 5th, cautious sentiment has expanded, leading to a continued wait-and-see stance.

As of 1:50 PM that day, the KOSPI was at 2,677.06, down 3.40 points (-0.13%) from the previous day. The KOSPI started the day up 9.99 points (+0.37%) but showed extreme mixed trends in the morning before declining.

Looking at trading trends, individuals and foreigners are net buying 78.3 billion KRW and 20.8 billion KRW respectively. On the other hand, institutions are net selling 106.6 billion KRW. Foreigners were selling throughout the morning but turned to buying in the afternoon. This marks the second consecutive day of net buying following the previous day.

Institutions have more than doubled their selling volume in the KOSPI market. Unlike the morning, private equity funds are leading sales with -70.6 billion KRW. Following are investment trusts at -24.4 billion KRW, other financials at -12.4 billion KRW, pension funds at -3.8 billion KRW, insurance at -1.5 billion KRW, and banks at -1.4 billion KRW.

Currently, 297 stocks are rising, while 573 stocks are falling.

Among the top 10 stocks by market capitalization, only Samsung Electronics +0.44%, Kakao +0.11%, and LG Chem +0.19% maintain upward momentum. The rest are all declining. Notably, Samsung Biologics shows a significant drop of -2.64%.

By sector, pharmaceuticals -2.18%, textiles and apparel -1.71%, and food and beverage -1.29% rank among the top in decline rates. Ildong Holdings -4.49%, Samil Pharmaceutical -3.30%, Bukwang Pharmaceutical -2.99%, and JW Pharmaceutical -2.20% are dragging down their sector indices.

Conversely, the electric and gas utilities sector +3.42% continues to show strength in the afternoon. Following are construction +0.75%, insurance +0.68%, machinery +0.64%, medical precision +0.41%, finance +0.36%, and telecommunications +0.22%.

Seo Sang-young, head of Media Content at Mirae Asset Securities, analyzed, "Since the FOMC meeting results will be announced tomorrow and the market will be closed, it is difficult for the domestic stock market to respond. Cautious sentiment is expanding, maintaining a wait-and-see stance."

As of 2:11 PM, the KOSDAQ is at 902.45, down 5.12 points (-0.56%) from the previous day. The KOSDAQ started at 911.16, up 3.59 points (+0.40%), but declined during the morning.

Foreigners and institutions are net selling 129.4 billion KRW and 15.0 billion KRW respectively. Individuals alone are net buying 150.2 billion KRW, but this is insufficient to defend the index decline. By institution, financial investment is leading sales with 16.1 billion KRW sold. Investment trusts -5.6 billion KRW and private equity funds -4.2 billion KRW follow. However, pension funds and insurance are net buying 5.9 billion KRW and 4.5 billion KRW respectively in the KOSDAQ.

Among the top 10 stocks by market capitalization, only battery-related stocks maintain strength. Ecopro BM +2.15% and L&F +3.20% show notable gains. Cheonbo +1.66% and Pearl Abyss +0.15% are also on the rise. Other stocks are declining.

By sector, food and tobacco -3.57% show the highest decline rate. Medical/precision instruments -1.76%, distribution -1.48%, publishing/media replication -1.36%, and pharmaceuticals -1.33% also rank high in decline rates. However, general electronics show a 1.42% rise. IT components +0.94% and telecommunications equipment +0.67% follow.

The number of stocks hitting the upper price limit in KOSDAQ has increased to four: Code Nature (2,015 KRW), FR Tech (4,040 KRW), Eco Plastic (3,740 KRW), and To Be Soft (1,250 KRW).

Lee Kyung-min, a researcher at Daishin Securities, analyzed, "Ahead of an important monetary policy, an individual stock market is unfolding. The KOSPI lacks a clear direction, and the KOSDAQ is declining due to simultaneous selling by foreigners and institutions. The market will focus more on the content of Fed Chair Powell's press conference than the already largely priced-in big step."