KOSPI Nears 2500 Close... Won-Dollar Falls Below 1300 Won

On the 28th, the KOSPI index opened at 2,437.57, up 0.91% (22.04 points) from the previous trading day, as dealers were working in the Hana Bank dealing room in Euljiro, Seoul. The won-dollar exchange rate started at 1,306 won, down 7.3 won. Photo by Moon Honam munonam@

[Asia Economy Reporter Junho Hwang] On the 5th, the stock market closed higher amid concentrated buying by foreign and institutional investors. Despite hawkish remarks from U.S. Federal Reserve (Fed) officials the previous day, investor sentiment revived due to expectations that inflationary pressures would ease, supported by the decline in international oil prices that had driven price increases this year. On the same day, the won-dollar exchange rate retreated from the 1300 level.

The KOSPI closed at 2490.80, up 17.69 points (0.72%) from the previous session. Foreign and institutional investors led the index's rise with net purchases of 308.7 billion KRW and 102.6 billion KRW, respectively. Meanwhile, individual investors, seizing profit-taking opportunities, conducted net sales amounting to 406.2 billion KRW.

It appears that foreign and institutional investors engaged in net buying due to expectations of easing inflationary pressures. Kyungmin Lee, a researcher at Daishin Securities, stated, "Concerns over escalating U.S.-China tensions surrounding Taiwan remain short-term noise. Despite consecutive hawkish remarks from Fed officials, the most probable year-end interest rate level based on the CME FedWatch tool remains at 3.25?3.5%, showing little change compared to one week and one month ago."

He added, "It is still premature to conclude a recession. The weakening of the vicious cycle among inflation, monetary policy, and the economy, along with solid second-quarter earnings this year, has led to a rebound in sectors that were excessively sold off and undervalued relative to earnings. Overall, investor sentiment is warming, and the stock market is continuing its rebound."

Among all stocks, 595 rose while 241 declined. Among the top market capitalization stocks, LG Chem stood out with a 5.42% increase. Samsung Biologics (2.29%), Samsung SDI (1.53%), and SK Hynix (1.03%) also showed upward trends.

By sector, the pharmaceuticals sector, which showed strength from early in the session, rose 2.91%, and in the afternoon, the steel and metal sector stood out with the highest increase of 3.04%. Within the sector, Korea Zinc (7.28%), Daeyang Metal (3.67%), and DCM (2.99%) showed strong gains.

The KOSDAQ also closed higher at 831.64, up 6.48 points (0.79%). Similar to the KOSPI, foreign and institutional investors made net purchases of 57.6 billion KRW and 39.6 billion KRW, respectively, while individual investors conducted net sales of 86.8 billion KRW, resulting in an upward trend in the index.

Among all stocks, 841 showed gains. Among the top market cap stocks, EcoPro attracted significant attention, closing at 114,900 KRW, up 12.21% from the previous session. The rise is attributed to the highlighted growth potential of its unlisted subsidiaries, EcoPro Materials and EcoPro CNG. Hyukjin Yoon, a researcher at SK Securities, explained, "The battery recycling plant is currently operating a 20,000-ton (scrap input basis) pretreatment plant in full swing. As confirmed by the sales increase in the first and second quarters of this year, the wet smelting plant is also believed to be fully operational. The automotive waste battery market is expected to grow rapidly after 2025, making EcoPro Group one of the most important subsidiaries."

On the same day, despite hawkish remarks from Fed officials the previous day, the won-dollar exchange rate closed at 1298.30 KRW, down 0.90%, as the U.S. dollar weakened.