Concerns Over COVID-19 Resurgence in China... KOSPI Drops 1% Amid Foreigners' Net Selling

[Asia Economy Reporter Minji Lee] The KOSPI and KOSDAQ indices closed lower amid concerns over the resurgence of COVID-19 in China.

On the 21st, the KOSPI ended the session at 2419.50, down 1.02% (24.98 points) from the previous trading day. The KOSPI started the day up 0.06% compared to the previous day but turned downward and widened its losses throughout the session.

With increasing pressure from the weakening Korean won, the stock market showed a steep decline that day. This was negative for foreign investor demand. Looking at investor trends, foreign investors were net sellers with a large volume, selling stocks worth 162 billion KRW alone, while individuals and institutions bought stocks worth 65.2 billion KRW and 79.5 billion KRW, respectively.

The main factors behind the won's depreciation include uncertainties surrounding China's zero-COVID policy and weak domestic export indicators. Lee Kyung-min, a researcher at Daishin Securities, said, "Due to the issue of COVID-19 related deaths in China, the KOSPI gradually widened its losses as the Greater China stock markets opened. China reported its first COVID-19 related death in about six months, and partial lockdown measures were imposed in Shijiazhuang city near Beijing." The November domestic export data, compiled until the 20th, showed a 16.7% decrease compared to the previous year, pushing the won-dollar exchange rate up to 1350 KRW.

By sector, concerns over the spread of COVID-19 in China led to sharp declines in China-related consumer stocks. LG Household & Health Care fell 4.37%, Amorepacific dropped 2.53%, and clothing-related company F&F declined 5.03%.

Among the top market capitalization stocks, Samsung Electronics (-0.65%), LG Energy Solution (-4.18%), SK Hynix (-2.38%), LG Chem (-3.12%), Samsung SDI (-1.00%), Hyundai Motor (-0.08%), NAVER (-1.62%), and Kia (-1.21%) all fell, while Samsung Biologics rose alone by 0.68%.

On the same day, the KOSDAQ index stood at 718.57, down 1.82% (13.35 points) from the previous trading day, with the decline steepening compared to the morning. In the KOSDAQ market, foreign investors and institutions sold stocks worth 66.9 billion KRW and 158.8 billion KRW, respectively, while individuals bought stocks worth 243.3 billion KRW alone.

Among the top market capitalization stocks, Ecopro BM (-3.57%), Celltrion Healthcare (-1.67%), L&F (-3.14%), HLB (-2.21%), Kakao Games (-2.19%), Ecopro (-1.20%), Celltrion Pharm (-3.91%), and Chunbo (-1.86%) declined, while Pearl Abyss (0.12%) and Lino Industrial (1.85%) rose.