Foreigners 'Saja' Push KOSPI Up 2.5% to Close... Recovering 2200 Level

[Image source=Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] The KOSPI index closed higher as foreigners maintained a buying advantage. It recovered the 2200 level for the first time in four trading days, with foreigners recording net purchases for three consecutive days.

On the 4th, the KOSPI index closed at 2209.38, up 53.89 points (2.50%) from the previous trading day. The index opened at 2189.51, up 34.02 points (1.58%), and extended its gains. During the session, it also recovered the 2210 level. Foreigners led the index rise by purchasing about 216.8 billion KRW worth of stocks. In contrast, individuals and institutions recorded net sales of 206.6 billion KRW and 14.3 billion KRW, respectively.

Among the top market capitalization stocks, LG Energy Solution rose more than 4%, showing the largest gain. Samsung Electronics followed with a 3.95% increase. SK Hynix (3.73%), LG Chem (3.54%), Samsung SDI (1.83%), Hyundai Motor (1.70%), Kia (1.25%), and Samsung Biologics (0.50%) also showed strength. On the other hand, NAVER, which was reported to have acquired a North American secondhand fashion platform, fell 8.79%, recording the largest decline. The closing price was the lowest in about 2 years and 5 months, and during the session, it dropped to 175,500 KRW, hitting a 52-week low. Kakao also showed a 2.10% decline.

By sector, medical precision equipment rose more than 5%. This was followed by machinery (3.89%), electrical and electronics (3.80%), steel and metals (3.76%), chemicals (3.34%), and manufacturing (3.13%) sectors showing upward trends. Meanwhile, service (-0.91%), food and beverage (-0.46%), and telecommunications (-0.07%) sectors were down.

Kim Seok-hwan, a researcher at Mirae Asset Securities, explained, "Due to the weak US September ISM Manufacturing Purchasing Managers' Index (PMI) and the partial withdrawal of the UK government's tax cut policy, the 10-year government bond yields of major countries fell by an average of 15 to 20 basis points (1bp=0.01%) compared to the previous day. Additionally, as the dollar index, which represents the value of the dollar against six major currencies, weakened, investors' preference for risk assets strengthened."

The US Institute for Supply Management (ISM) released the manufacturing PMI, which fell from 52.8 in August to 50.9 in September. Furthermore, the UK government announced on the 23rd of last month that it would withdraw the 45% tax cut benefit for the highest income earners, amounting to about 2 billion pounds, from the approximately 45 billion pounds tax cut package.

Lee Kyung-min, a researcher at Daishin Securities, said, "The US ISM manufacturing index fell below the expected 52.8, which somewhat eased tightening concerns and bond volatility. Along with the news of the UK tax cut withdrawal, financial market anxiety originating from the UK retreated, leading to strength in US after-hours futures, and as a result, Asian markets including the KOSPI generally recorded gains."

On the same day, the KOSDAQ index rose more than 3%. It closed at 696.79, up 24.14 points (3.59%) from the previous trading day. The index started trading at 685.19, up 12.54 points (1.86%), and extended its gains. Foreigners and institutions recorded net purchases of 59.1 billion KRW and 132.6 billion KRW, respectively, leading the index rise. Meanwhile, individuals recorded net sales of about 181.4 billion KRW.

Among the top market capitalization stocks, all showed gains. Ligno Industrial rose 7.87%, entering the top 10 by market capitalization. This was followed by EcoPro BM (4.88%), HLB (4.67%), Pearl Abyss (3.11%), Kakao Games (2.81%), L&F (2.08%), EcoPro (1.38%), JYP Ent. (1.36%), Celltrion Pharm (1.25%), and Celltrion Healthcare (1.03%).

Meanwhile, the won-dollar exchange rate fell for the third consecutive trading day. It closed at 1,426.5 KRW per dollar, down 3.7 KRW from the previous day's closing price. Although it rose to the low 1430 KRW range early in the session, it then showed a downward trend.