[Asia Economy Reporter Ji Yeon-jin] The KOSPI index continued to fluctuate around the 2670 level on the afternoon of the 3rd amid a shift to foreign buying. The KOSDAQ, after giving up most of its early gains, showed a slight upward trend.
As of 2:15 PM, the KOSPI index was trading at 2669.16, up 10.97 points (0.38%) from the previous day.
The index started the day with a 20.58-point (0.77%) rise, but the upward momentum significantly slowed during the morning session due to increased foreign selling. However, at this time, foreigners had turned to net buying worth approximately 48.8 billion KRW. Institutions were net buyers of about 142.2 billion KRW, while individuals were net sellers of about 189 billion KRW.
Today's rebound stemmed from a recovery in investor sentiment following the previous day’s U.S. stock market close higher, driven by expectations that the U.S. Federal Reserve (Fed) would slow the pace of interest rate hikes due to weak private sector employment data.
However, the index’s upside was capped as Statistics Korea announced that South Korea’s consumer prices in May recorded the highest increase in 13 years and 9 months.
According to Statistics Korea, the consumer price index for May was 107.56 (2020=100), up 5.4% compared to the same month last year. This rate of increase is the highest since August 2008 (5.6%).
Moreover, with mixed comments from Fed officials regarding tightening, and with the U.S. May nonfarm payroll data scheduled for release tonight potentially altering expectations for Fed monetary policy, domestic investors are taking a wait-and-see approach.
Lee Kyung-min, a researcher at Daishin Securities, said, "Looking at Korea’s inflation indicators, the burden of tightening remains, so the domestic stock market is not gaining upward momentum."
"There is a cautious sentiment ahead of tonight’s U.S. employment data release, and compared to the U.S., which saw a large drop earlier this year, the Korean market has held up relatively well, so it is rising less than the U.S. market," he explained.
In the KOSPI market, Kakao, which showed nearly a 4% rise early in the session, saw its gains narrow to 2.39%, while LG Chem was up 2.98%. SK Innovation showed nearly a 3% rise supported by simultaneous buying from institutions and foreigners. Samsung Electronics fell back below 67,000 KRW in the afternoon.
By sector, chemicals and banks recorded gains of around 1.9%, while retail and transportation and warehousing sectors also showed increases of over 1%. However, food and beverage, transportation equipment, and securities sectors were weak.
The KOSDAQ was trading at 890.81, down 0.33 points (0.04%) from the previous day. Individuals were net buyers of about 185.6 billion KRW, and institutions net buyers of about 2.1 billion KRW, but foreigners sold about 167.6 billion KRW, pulling the index down.
On the KOSDAQ market, 714 stocks were rising, while 602 were declining. SHD surged to the daily price limit during the session before slightly easing, and Seoham Machinery was trading at the upper limit.
Celltrion Healthcare and Celltrion Pharm showed gains around 1% after Celltrion announced it had submitted a clinical phase 3 trial plan for its rheumatoid arthritis biosimilar ‘CT-P47’ to the U.S. Food and Drug Administration (FDA).
On the other hand, HLB was down about 3%, and L&F fell 4.15%, showing the steepest decline.
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