KOSPI Ends Slightly Lower Amid Heavy Selling of Large-Cap Stocks
Dollar Strength Resumes, Foreigners and Institutions Maintain 'Sell' Stance
KOSDAQ Narrows Losses with Late Institutional Buying
Secondary Battery Component Stocks Rally, Bio Stocks Plunge
On the 20th, dealers are working in the dealing room of Hana Bank in Euljiro, Seoul. On this day, the KOSPI index opened at 2373.64, up 17.98 points (0.76%) from the previous trading day. The won-dollar exchange rate opened at 1390.0, down 3.6 won. Photo by Moon Honam munonam@
[Asia Economy Reporter Ji Yeon-jin] The domestic stock market closed lower on the 21st as caution over risk assets spread ahead of the U.S. Federal Open Market Committee (FOMC) interest rate hike announcement.
The KOSDAQ index fell more than 1% as the dollar strengthened again, with the USD/KRW exchange rate exceeding 1,395 during the session, but the decline narrowed as institutional investors switched to buying near the close. The USD/KRW exchange rate recorded 1,394.2, up 4.7 points (0.34%) from the previous day.
On the same day, the KOSPI index continued its weakness from the opening, with foreign and institutional investors selling amid a wait-and-see stance ahead of the FOMC interest rate hike announcement early on the 22nd. The index closed at 2,347.21, down 20.64 points (0.87%) from the previous day. Foreign investors net sold about 273.1 billion KRW, and institutions also sold about 65.9 billion KRW, weighing on the index. In contrast, individual investors bought stocks worth 325.4 billion KRW.
The announcement of South Korea's trade deficit of 4.1 billion USD early in the session also dampened investor sentiment.
Kim Seok-hwan, a researcher at Mirae Asset Securities, said, "Ahead of tomorrow's early morning FOMC, selling pressure centered on large-cap stocks expanded," adding, "The U.S. stock market also fell due to concerns about economic slowdown and a sharp rise in 10-year Treasury yields, which dampened overall investor sentiment in Asian markets."
In fact, most of the top market capitalization stocks on the KOSPI closed lower that day. Samsung Electronics, which hit a 52-week high of 55,100 KRW during the session, narrowed its losses after the close and ended trading at 55,300 KRW, down 0.90% from the previous day. SK Hynix, which fell more than 1% early in the session, rebounded during the day but ultimately closed flat.
LG Energy Solution (-0.83%), LG Chem (-0.79%), Hyundai Motor (-0.76%), and Kia (-8.87%) closed slightly lower,
while Samsung SDI fell 2.37%, and Samsung Biologics dropped 1.75%. NAVER (-2.37%) and Kakao (-1.99%) also fell to new lows early in the session but slightly reduced their losses during the day.
The KOSDAQ index rose 5.46 points (0.72%) to 754.89. Institutional investors, who were net sellers early in the session, turned to net buyers with 10.8 billion KRW near the close, limiting the downside. Individual investors net bought stocks worth 70 billion KRW, while foreign investors net sold 74.9 billion KRW.
Among the top market capitalization stocks on the KOSDAQ, Celltrion Healthcare showed weakness from early in the session and closed down 4.0%. Celltrion Pharm (-2.94%), Alteogen (-3.21%), and HLB (-2.21%) also recorded steep declines.
On the other hand, L&F (0.05%), which showed a decline early in the session, rebounded slightly, and EcoPro BM (1.96%) and EcoPro (2.23%) also closed higher.
In the KOSDAQ market that day, Sambo Motors surged to the daily price limit following news that Tesla, the U.S. electric vehicle company, is expanding its Full Self-Driving (FSD) software, currently in pilot operation, to 160,000 vehicles in the North American region. YTN also hit the upper limit due to privatization news, and Korea Economic TV, identified as the acquirer of YTN, closed up 16.28%. As a result, iMBC closed at the upper limit, and Asia Economy and Digital Chosun also recorded gains exceeding 10%.
Conversely, Hanmi Pharmaceutical (-15.54%) plunged after concerns were raised about the efficacy of a new drug it licensed to the U.S., dragging down Hanmi Science (-14.64%), Enzychem Lifesciences (-12.68%), and other pharmaceutical and biotech stocks.
Lee Jin-woo, head of investment strategy at Meritz Securities, said, "The domestic stock market is cautious ahead of the big event, the FOMC," adding, "If the market consensus for the year-end base rate of 4.5% or higher is deviated from tomorrow morning, the market shock could be significant. However, since the giant step has already been priced in, there may not be major changes going forward."
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