KOSPI Attempts to 'Settle' at 2530 Driven by Institutions and Foreigners' Joint Buying... Individuals Realize Profits

[Image source=Yonhap News]

[Asia Economy Reporter Lee Seon-ae] Thanks to two consecutive days of combined buying by foreigners and institutions, the KOSPI has been on an upward trend for two trading days in a row. It appears that the stabilization above 2500 is being smoothly achieved.

On the 12th, the KOSPI started at 2519.66, down 4.12 points, but soon turned upward and rose to 2530. Maintaining the upward trend, as of 9:18 a.m., it is holding above 2525. The combined buying by foreigners and institutions is supporting the index's rise. However, individuals are realizing profits, restraining the index from breaking through the upper levels.

Foreigners are net buying about 29.8 billion KRW. Institutions are also buying about 42.2 billion KRW, with pension funds leading the way. Only individuals are selling about 71.1 billion KRW, realizing profits for two consecutive trading days. In the KOSDAQ market, foreigners and institutions are net selling about 55.5 billion KRW and 5 billion KRW respectively. Only individuals are net buying about 6.8 billion KRW.

Kim Seok-hwan, a researcher at Mirae Asset Securities, said, "The domestic stock market, which smoothly passed the option expiration day yesterday, needs to pay attention again to the inflow of foreign demand," adding, "Yesterday, the market rose mainly among large-cap companies due to foreign net buying of futures and the arbitrage trading by financial investors, so there is a possibility of some profit-taking selling."

Han Ji-young, a researcher at Kiwoom Securities, said, "The KOSPI is expected to attempt stabilization above the 2500 level, supported by news that the US producer price index (PPI) came in below expectations and the decline in domestic import prices (June 33.6% → July 27.9%), which raises expectations of easing profitability issues for companies," adding, "However, due to short-term profit-taking selling following four consecutive weeks of gains on a weekly basis, the upper limit of today's index is expected to be limited, showing a breathing pause in the stock price movement."

Among the top 10 stocks by market capitalization today, SK Hynix (0.43%), Naver (0.19%), and Hyundai Motor (1.04%) are rising. Meanwhile, Samsung Electronics (-0.33%) and LG Energy Solution (-0.11%) are declining.

Meanwhile, following a slowdown in the consumer price index (CPI) inflation rate, the producer price index (PPI) also recorded a monthly decline for the first time in over two years, while the New York stock market closed mixed. On the 11th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 33,336.67, up 27.16 points (0.08%) from the previous session. The Standard & Poor's (S&P) 500 index fell 2.97 points (0.07%) to 4207.27, and the tech-heavy Nasdaq index closed down 74.89 points (0.58%) at 12,779.91. Investors digested the CPI released the day before and were relieved by the significant slowdown in the July PPI inflation rate. The market expects that as inflation slows, the Federal Reserve's tightening stance may ease.

Craig Erlam, senior market analyst at OANDA, said in a report, "Overall, the impact of the US inflation slowdown is influencing the market, and investors have definitely turned to a more optimistic mood." Jamie Cox of Harris Financial Group also said in a report, "There are increasing indicators showing that we have turned the corner on inflation," adding, "The Fed no longer needs to hit the emergency brake on monetary policy, which is a good thing."