Biden's Visit to Korea Expected and China's Economic Stimulus... KOSPI Rebounds 1.8% to Return Above 2600

[Image source=Yonhap News]

[Asia Economy Reporter Lee Myunghwan] On the 20th, the KOSPI rose nearly 2%, recovering the 2600 level just one day after falling due to the plunge in the U.S. stock market the previous day. Although individual investors sold more than 1 trillion won in net sales in the KOSPI market, the index rose due to net purchases by foreigners and institutions.

Analysts say the rise reflects expectations ahead of U.S. President Joe Biden's visit to Korea. The People's Bank of China also cut the Loan Prime Rate (LPR), which serves as the de facto benchmark lending rate, by 0.15 percentage points to stimulate the economy, which helped improve investor sentiment.

On that day, the KOSPI closed at 2,639.29, up 46.95 points (1.81%) from the previous trading day. The KOSPI opened at 2,605.78, up 13.44 points (0.52%), and gained momentum in the afternoon session. By investor type, individuals alone sold stocks worth 1.039 trillion won, showing strong selling pressure. Meanwhile, foreigners and institutions bought stocks worth 196.7 billion won and 837.2 billion won, respectively.

Kim Seokhwan, a researcher at Mirae Asset Securities, commented on the market, saying, "Despite the decline in the U.S. stock market the previous day, China's expanded economic stimulus measures and expectations for President Biden's visit were reflected." He added, "There are also expectations that LG Energy Solution and GM will start operating a joint battery plant in the second half of the year, and news that President Biden is scheduled to meet Hyundai Motor Group Vice Chairman Chung Euisun after his visit was also factored in."

All of the top 10 stocks by market capitalization rose. LG Chem surged 8.57% (43,000 won) from the previous day to close at 545,000 won. LG Energy Solution also rose 4.45%. Other gainers included ▲Samsung Electronics (0.74%) ▲SK Hynix (1.35%) ▲Samsung Biologics (1.51%) ▲Samsung Electronics Preferred (1.00%) ▲Naver (1.29%) ▲Samsung SDI (2.37%) ▲Hyundai Motor (2.47%) ▲Kakao (3.23%).

All sectors in the KOSPI market closed higher. Among them, non-metallic minerals (3.21%), chemicals (3.17%), and machinery (3.07%) showed notable gains.

The KOSDAQ index closed at 879.88, up 16.08 points (1.86%) from the previous day. The KOSDAQ started at 866.76, up 2.96 points (0.34%), and the upward momentum intensified in the afternoon session. By investor type, individuals sold stocks worth 205.5 billion won, while foreigners and institutions bought stocks worth 107.3 billion won and 107.4 billion won, respectively.

All of the top 10 KOSDAQ stocks by market capitalization also closed higher. Celltrion Healthcare rose 5.71% (3,100 won) to close at 57,400 won. Kakao Games also ended trading up 5.18% (2,900 won) at 58,900 won. Other gainers included ▲EcoPro BM (3.92%) ▲L&F (1.60%) ▲HLB (2.83%) ▲Pearl Abyss (4.69%) ▲Celltrion Pharm (3.52%) ▲Chunbo (0.04%) ▲Rino Industrial (0.83%) ▲CJ ENM (2.95%).

By sector, digital content (4.56%), other manufacturing (4.28%), and entertainment culture (3.90%) rose. Computer services (-0.55%) and paper & wood (-0.22%) fell slightly.