Russia Raises Concerns Over Gas Supply... KOSPI Intraday Gains Narrow

[Image source=Yonhap News]

[Asia Economy Reporter Minji Lee] As the KOSPI continues its attempt to stabilize around the 2400 level after fluctuating during the session, the gas supply issue from Russia, which initially acted as a positive factor, seems to be resurfacing.

At 10:52 a.m. on the 20th, the KOSPI stood at 2391.54, up 0.87% (20.57 points) from the previous trading day. Although it showed a strong rise of over 1.5% early in the session, the increase narrowed somewhat as the net buying volume by foreigners decreased. Currently, foreigners and individuals have purchased stocks worth 9.5 billion KRW and 39.6 billion KRW respectively, while institutions alone sold stocks worth 41.7 billion KRW.

The early rise in the KOSPI was driven by positive momentum from the U.S. stock market. News that the Nord Stream gas pipeline, which had been shut down for 10 days for facility inspections, would soon resume operations acted as a positive factor. Concerns about a deep economic slowdown had been expected if gas supply was interrupted, but with the resumption of normal gas supply, those worries were alleviated. Additionally, investors’ risk asset preference expanded as the market assessed Apple’s recent tightening management news?which had put downward pressure on the index the previous day?as ‘excessive.’

However, the upward momentum has somewhat weakened. This is attributed to President Putin’s statement that “Gazprom has still not received official documents related to the return of turbines. If they are not returned, gas supply will be further reduced from the current 60 million cubic meters per day to 30 million cubic meters.” Meanwhile, the European Union (EU) reportedly plans to propose to member countries a voluntary reduction of gas usage by 15% starting next month in preparation for a potential cutoff of Russian supply.

By sector, securities (2.9%), finance (2.34%), services (1.86%), chemicals (1.9%), and non-metallic minerals (1.7%) showed the largest gains. Securities and financial stocks had previously suffered large declines due to concerns about economic slowdown, so the expansion of risk appetite led to increased investor interest in these sectors. By stock, Hanwha Investment & Securities (4.4%), Kiwoom Securities (4.1%), Mirae Asset Securities (3.3%), Samsung Securities (3.0%), and Hanyang Securities (2.8%) showed upward trends.

Top market capitalization stocks all showed gains. Samsung Electronics traded at 61,100 KRW, up 0.33% from the previous day, and SK Hynix rose 2% to 102,000 KRW. LG Energy Solution (0.52%), Samsung Biologics (0.98%), NAVER (2.26%), Hyundai Motor (1.06%), LG Chem (4.03%), Samsung SDI (2.39%), Kia (0.37%), and Kakao (2.47%) also showed upward trends.

The KOSDAQ index rose close to the 800 level, showing a 1.3% increase. At the same time, the KOSDAQ index stood at 792.19, up 1.26% (9.86 points) from the previous trading day. The index opened at 792.94, up 1.36% (10.61 points), and is expanding its gains. In the market, foreigners and individuals sold stocks worth 24.1 billion KRW and 3.4 billion KRW respectively, while institutions alone purchased stocks worth 28.7 billion KRW.

By sector, digital content (2.92%), entertainment culture (2.74%), and finance (2.75%) showed the largest gains. Gaming-related stocks rose, including Wemade Max (6.8%), Longtu Korea (6.1%), Dragonfly (5.4%), Wemade (5%), and Com2uS Holdings (3.1%). Top market capitalization stocks all showed gains: Celltrion Healthcare (0.14%), EcoPro BM (0.36%), L&F (3.98%), HLB (2.96%), Kakao Games (2.95%), Pearl Abyss (1.52%), Celltrion Pharm (1.66%), Seegene (1.21%), and Chunbo (1.55%) all showed upward trends.

Seonghoon Seo, a researcher at Samsung Securities, said, “The dollar index has been declining for three consecutive trading days, which is contributing to improved investor sentiment in the domestic stock market. Since it is earnings season, it would be reasonable to increase interest in stocks with improving earnings.”