Foreigners Switch to 'Lion' in the Afternoon
Won-Dollar Closes at 1286.5 Won
KOSPI, Foreigners Buy 266.7 Billion Won
Hyundai Motor, Kia Show Notable Uptrend
Fed's Bullard: "US Stock Market Overreacting to Recession Concerns"
[Asia Economy Reporter Hwang Yoon-joo] The KOSPI returned to the 2400 level after four trading days. The remarks by James Bullard, President of the Federal Reserve Bank of St. Louis, and the won-dollar exchange rate dropping to the 1280 range attracted foreign buying, driving the index. The KOSDAQ also closed up by more than 2%.
On the 27th, the KOSPI closed at 2401.92, up 1.49% (35.32 points) from the previous trading day. The market opened at 2383.20, up 0.70% (16.60 points), then showed mixed trends with a decline within about 20 minutes, but soon rebounded and recorded an intraday high of 2418.94 in the afternoon.
◆ Won-Dollar Exchange Rate Falls to 1280s... Foreign Buying Inflows= The KOSPI soared in the afternoon because foreigners switched to 'buying.' Although institutions and foreigners showed 'selling' right after the opening, foreigners alone net purchased 266.7 billion won that day. Individuals switched to 'selling,' net selling 95.3 billion won, and institutions net sold 203.7 billion won respectively.
The decline in the won-dollar exchange rate is cited as the background for the foreign buying inflow. In the Seoul foreign exchange market that day, the won-dollar exchange rate opened at 1290 won, down 8.20 won, and closed at 1286.5 won, down 11.7 won.
Seo Sang-young, head of Mirae Asset Securities, said, "The domestic stock market synchronized with the U.S. stock market, which rose last week thanks to James Bullard's remarks easing recession concerns," adding, "The exchange rate also fell to the 1280 won level, attracting foreign buying and driving the index up."
Earlier, Federal Reserve Chairman Jerome Powell claimed that the economy in the second half of the year would be stronger than expected, followed by Bullard mentioning that the U.S. stock market decline was an overreaction to recession concerns.
◆ Hyundai Motor Holds Strong in U.S. Electric Vehicle Market... Also 'Good' in KOSPI= Among the top 10 stocks by market capitalization, only Samsung Biologics (-3.01%) declined. Hyundai Motor (+5.78%) and Kia (+4.39%) showed remarkable gains. On the 25th, Bloomberg published an article titled "Sorry Musk, Hyundai Motor is quietly doing well," covering Hyundai's strong performance in the U.S. electric vehicle market. This is interpreted as having stimulated investor sentiment.
By sector, only telecommunications (-0.40%) and pharmaceuticals (-0.37%) declined. Machinery (+4.65%) and transportation equipment (+4.57%) had the highest gains.
Han Jae-hyuk, a researcher at Hana Financial Investment, explained, "The KOSPI rose due to bargain hunting after recent excessive declines and foreign buying supported by the previous day's rise in the U.S. stock market," adding, "Related stocks showed strength following Bloomberg's analysis of Hyundai and Kia's expanding dominance in the electric vehicle market."
The KOSPI closed at 770.60, up 2.71% (20.30 points) from the previous trading day. Although the intraday gains narrowed at one point in the morning, the index steadily increased, creating a strong market.
◆ KOSDAQ Soars on Ecopro BM Surge... Kakao Games Strong= The KOSDAQ market was driven by individuals. Individuals alone net purchased 73.5 billion won. Foreigners and institutions net sold 9.8 billion won and 57.5 billion won, respectively.
Among the top 10 stocks by market capitalization, only Alteogen (-4.87%) declined, and Pearl Abyss remained flat. The rest showed gains. Ecopro BM surged over 10% due to the illusion effect of the ex-rights date for a bonus issue and maintained a strong rally throughout the afternoon. Kakao Games, which released the new title "Uma Musume," also closed up 4.66%.
By sector, notable gains were seen in general electric and electronics (+6.44%), non-metal (+5.07%), metals (+3.76%), and other manufacturing (+3.75%).
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