[Asia Economy Reporter Kwon Jae-hee] The KOSPI index recovered to the 2520 level. This is interpreted as reflecting expectations of an 'inflation peak-out' after the U.S. Consumer Price Index (CPI) announced the previous day fell short of forecasts.
On the 11th, the KOSPI index closed at 2523.78, up 1.73% (42.90 points) from the previous trading day. The index opened at 2507.74, up 1.08% (26.86 points) from the previous close, maintaining a steady trend.
The U.S. July CPI inflation rate, announced on the 10th (local time), was 8.5% year-on-year, lower than both the previous month (9.1%) and market expectations (8.7%), which is seen as spreading optimism about an inflation peak-out. As a result, the three major U.S. indices all closed sharply higher. The Dow Jones Industrial Average rose 1.63%, the Standard & Poor's (S&P) 500 index increased 2.13%, and the Nasdaq index climbed 2.89%.
Following the CPI announcement, the probability of a 75 basis points (bp) increase in the benchmark interest rate at the September Federal Open Market Committee (FOMC) meeting has significantly decreased, while the possibility of a 50 bp hike is gaining traction again.
On the same day, the won-dollar exchange rate closed at 1303.0 won, down 7.4 won from the previous session.
By investor type, foreigners net bought 1.0367 trillion won, and institutions net bought 467 billion won. Individuals net sold 602.1 billion won. On the options expiration day, foreigners also net bought 764.5 billion won in KOSPI 200 futures, driving the index higher.
Lee Kyung-min, a researcher at Daishin Securities, said, "The won-dollar exchange rate fell around the 1300 won level, attracting net buying from foreigners in both spot and futures markets, which acted as a supply-demand factor supporting the stock market rise." He added, "The sharp rise in the Nasdaq boosted investor sentiment in domestic tech stocks, leading the KOSPI's increase."
He continued, "The U.S. July Producer Price Index (PPI), to be announced tonight, is expected to slow to 10.4% year-on-year from 11.3% the previous month," and analyzed, "With expectations of easing inflationary pressure gaining momentum, the KOSPI's technical rebound is likely to continue."
All stocks within the top 30 by market capitalization rose.
Citigroup issued a diagnosis that the semiconductor sector shows clear signs of bottoming out, leading related stocks Samsung Electronics (1.35%) and SK Hynix (1.63%) to rebound, followed by significant gains in tech stocks such as NAVER (2.10%) and Kakao (4.23%). LG Energy Solution rose 3.06%.
By sector, non-metallic minerals (3.03%), steel & metals (2.97%), services (2.42%), paper & wood (2.05%), electrical & electronics (1.98%), chemicals (1.88%), and transportation & warehousing (1.78%) saw notable increases.
The KOSDAQ index closed at 832.15, up 1.45% (11.88 points) from the previous session.
The index opened at 831.99, up 1.43% (11.72 points) from the previous close.
In the KOSDAQ market, institutions net bought 106.4 billion won, and foreigners net bought 69.1 billion won. Individuals net sold 166.7 billion won.
Among the top market capitalization stocks, game and media stocks such as Kakao Games (5.28%) and Studio Dragon (4.35%) showed strength. Secondary battery-related stocks like Ecopro BM (-0.82%), L&F (-1.48%), and Ecopro (-0.08%), which had recently been on the rise, declined slightly.
On this day, the trading value on the KOSPI and KOSDAQ markets was approximately 9.397 trillion won and 6.897 trillion won, respectively.
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