Foreign and Institutional Net Buying Boosts KOSPI Close... 'Earnings Announcement' Samsung Electronics Up 3.19%

[Image source=Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] The KOSPI index closed higher as foreigners and institutions turned net buyers after two trading days. Samsung Electronics, which announced its preliminary Q2 earnings, rose more than 3%, leading the index's gains.

On the 7th, the KOSPI index closed at 2,334.27, up 42.26 points (1.84%) from the previous trading day. After falling below the 2,300 level for the first time in 1 year and 8 months on the previous trading day, the index opened at 2,308.97, up 16.96 points (0.74%). Foreigners and institutions, who had been net sellers, turned to net buyers, expanding the gains. The index even surpassed the 2,340 level during the session. Foreigners and institutions bought approximately 144.7 billion KRW and 316.4 billion KRW worth of stocks respectively, driving the index higher. Meanwhile, individuals were net sellers of about 473.1 billion KRW.

Most of the top market capitalization stocks recorded gains. Samsung SDI rose 3.64%, posting the largest increase. LG Chem also rose 3.56%. Samsung Electronics, which announced preliminary Q2 earnings with consolidated sales of 77 trillion KRW and operating profit of 14 trillion KRW, rose 3.19%. These results represent increases of 20.94% and 11.38% respectively compared to the same period last year but fell short of consensus estimates. Additionally, Samsung Biologics (2.12%), SK Hynix (1.95%), Hyundai Motor (1.45%), LG Energy Solution (0.81%), Naver (NAVER) (0.62%), and Kia (0.40%) also rose in that order. On the other hand, Kakao fell 0.68%.

By sector, all sectors rose. Machinery (3.88%), pharmaceuticals (2.72%), electrical and electronics (2.55%), textiles and apparel (2.51%), manufacturing (2.22%), construction (2.19%), and chemicals (2.13%) rose in that order. Meanwhile, securities rose only 0.40%, showing the smallest gain.

Park Kwang-nam, a researcher at Mirae Asset Securities, explained, "The current account deficit was large but turned to a surplus, which contributed to the won's strength and influenced the decline in the won-dollar exchange rate, leading to increased foreign demand. Although Samsung Electronics' preliminary Q2 earnings fell short of consensus, the resolution of uncertainties also drove the rise in stock prices and the KOSPI index."

According to the preliminary balance of payments statistics released by the Bank of Korea on the day, the current account surplus for May was $3.86 billion (approximately 5.02 trillion KRW). Imports surged in April and overseas dividends overlapped, causing a deficit, but the surplus was restored within a month. The won-dollar exchange rate closed at 1,299.8 KRW, down 6.5 KRW from the previous day's closing price.

Kim Young-hwan, head of domestic investment strategy at NH Investment & Securities, said, "The won-dollar exchange rate and international oil prices fell, resulting in a technical rebound. Whether this rise will continue as a trend remains to be seen." On the 6th (local time), the August West Texas Intermediate (WTI) crude oil price on the New York Mercantile Exchange closed at $98.53 per barrel, down 97 cents (0.97%) from the previous session. On the 5th, it had plunged 8.24% to $99.50 per barrel.

The KOSDAQ index closed at 757.97, up 13.34 points (1.79%). As on the previous trading day, individuals and institutions showed buying momentum. Individuals and institutions were net buyers of about 43.7 billion KRW and 33.1 billion KRW respectively. Foreigners were net sellers of 77.9 billion KRW. The index had closed at 744.63, down 6.32 points (0.84%) on the previous trading day but recovered above the 750 level on this day.

Among the top market capitalization stocks, all except L&F (-1.51%) showed gains. Seegene rose more than 9%, followed by Studio Dragon (1.52%), Celltrion Pharm and EcoPro BM (1.22%), Pearl Abyss (0.97%), Alteogen (0.96%), Celltrion Healthcare (0.69%), Kakao Games (0.51%), and HLB (0.42%).