Foreigners and Institutions 'Sell-off' Weigh on KOSPI by 0.5%... Impact of Geopolitical Risks

[Image source=Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] The KOSPI index is showing weakness due to selling pressure from foreigners and institutions. However, after falling more than 1%, the decline narrowed.

As of 11:10 a.m. on the 16th, the KOSPI index was recorded at 2,467.66, down 12.67 points (0.51%) from the previous trading day. The index opened at 2,487.00, up 6.67 points (0.27%), but turned downward early in the session, falling to 2,446.79. It then reduced its losses and rose back to the 2,460 level. Individual investors net bought about 313.7 billion KRW, helping to defend against further declines. Foreigners and institutions sold approximately 189.5 billion KRW and 127.2 billion KRW, respectively.

Among the top market capitalization stocks, most were weak except for LG Energy Solution (0.17%) and Samsung SDI (0.14%). Samsung Biologics fell more than 2%, followed by Hyundai Motor (-1.15%), Naver (-0.78%), and SK Hynix (-0.44%). Celltrion also dropped nearly 3%.

By sector, non-metallic minerals (-2.67%), pharmaceuticals (-2.37%), transportation and warehousing (-1.47%), textiles and apparel (-1.18%), construction (-0.98%), and securities (-0.92%) declined in that order. Electric and gas utilities (0.93%) and food and beverage (0.31%) sectors showed gains.

The KOSPI index is under pressure today following news that a missile, presumed to be launched by Russia, fell in Poland. U.S. President Joe Biden held an emergency meeting with leaders of the Group of Seven (G7) and NATO member countries regarding the missile strike in Poland.

Seo Sang-young, head of the Media Content Division at Mirae Asset Securities, said, "Due to geopolitical risks, the dollar strengthened, affecting foreign investor flows. However, since all parties have much to lose, the risk of escalation is considered low."

As of 11 a.m. today, the USD/KRW exchange rate traded at 1,325.3 won, up 7.7 won from the previous trading day.

On the 15th (local time), the Dow Jones Industrial Average closed at 33,592.92, up 56.22 points (0.17%), and the large-cap S&P 500 index ended at 3,991.73, up 34.48 points (0.87%). The tech-heavy Nasdaq index closed at 11,358.41, rising 162.19 points (1.45%). The October Producer Price Index (PPI) rose only 0.2% month-over-month, below market expectations, fueling hopes for easing inflation and pushing the market higher. However, due to geopolitical risks, the dollar strengthened, erasing some of the gains late in the session.

At the same time, the KOSDAQ index fell 2.16 points (0.29%) to 742.80 compared to the previous day. Like the KOSPI, it opened higher at 746.55, up 1.59 points (0.21%), but then declined. Individual investors net bought 166.8 billion KRW, while foreigners and institutions net sold about 136.2 billion KRW and 17.7 billion KRW, respectively.

Among the top market capitalization stocks, HLB and EcoPro BM fell more than 3%. Celltrion Healthcare and Celltrion Pharm also dropped over 2%. Pearl Abyss and Cheonbo rose 2.50% and 2.35%, respectively. Alteogen increased by 4.90%.