KOSPI Closes at 2350 Level... Large-Cap Stocks Surge on Foreign and Institutional 'Buying'

Slower US Wage Growth Boosts Risk Asset Preference
Naver and Kakao Surge Over 6%
Samsung Electronics Hits '60,000 Won' After 17 Trading Days
Auto Stocks Rally on IRA Reconsideration Hopes

[Image source=Yonhap News]

[Asia Economy Reporter Hwang Yoon-joo] On the 9th, the KOSPI and KOSDAQ closed higher due to combined buying by foreigners and institutions. The KOSPI settled at the 2350 level, while the KOSDAQ returned to the 700 level. The confirmation of a slowdown in wage growth in the U.S. is interpreted as having a positive impact on the domestic stock market following the U.S. stock market. Large-cap stocks surged together, with Samsung Electronics reclaiming the '60,000 won' mark after 17 trading days.

The KOSPI index closed at 2350.19, up 2.63% (60.22 points) from the previous trading day. The KOSPI started at 2315.87, up 1.13% (25.90 points), and the rise expanded as institutions switched to buying.

Foreigners and institutions net bought 658.5 billion won and 741 billion won, respectively. Initially, only foreigners were net buyers right after the market opened, but institutions joined in. Individuals were net sellers alone, offloading 1.395 trillion won. In the futures market, foreigners sold 272.3 billion won, while institutions bought 179.5 billion won. Institutions also turned to buying in the futures market. Institutional demand lifted the index in the latter part of the session.

All of the top 10 market capitalization stocks closed higher. The surge in growth stocks and the rise in semiconductors and automobiles were prominent. Among them, Kakao rose 6.82%, recording the highest increase. Naver also jumped 6.22%. Samsung Electronics and SK Hynix rose 2.88% and 3.49%, respectively. Hyundai Motor and Kia increased by 2.82% and 4.23%, respectively. LG Chem rose 5.05%, and LG Energy Solution surged 4.50%.

Growth stocks expanded investor sentiment as the slowdown in U.S. wage growth was confirmed. On the 6th (local time), the U.S. Department of Labor announced that nonfarm payrolls for December last year were 223,000. This exceeded expectations (200,000) but was lower than the previous month (256,000). Hourly wages also fell from 0.40% to 0.27% month-over-month. Compared to the previous year, the growth slowed from 4.8% to 4.6%.

Nonfarm payrolls are a key factor the Federal Reserve (Fed) considers when deciding interest rates. The signal of reduced inflationary pressure improved preference for risk assets.

Samsung Electronics reported an operating profit of 4.3 trillion KRW in the fourth quarter of last year on a consolidated basis, a 69% decrease compared to the same period last year. On the 6th, Samsung Electronics Seocho Building in Seocho-gu, Seoul. / Photo by Kang Jin-hyung aymsdream@

Semiconductors also benefited from the positive momentum in the U.S. stock market. The Philadelphia Semiconductor Index closed up 4.67%. Semiconductor stocks such as Nvidia (+4.16%), Micron (+3.77%), and AMAT (+6.49%) also rose. On the 9th, foreigners net bought 184.435 billion won and institutions 154.981 billion won worth of Samsung Electronics shares. This marked two consecutive trading days of simultaneous net buying by foreigners and institutions. The automobile sector showed strength amid expectations for additional discussions on the Inflation Reduction Act (IRA) following the visit of the U.S. Deputy Secretary of State for Economic Affairs to Korea.

Lee Kyung-min, a researcher at Daishin Securities, explained, "The KOSPI confirmed the slowdown in U.S. wage growth, and the possibility of a baby step rate hike at the February Federal Open Market Committee (FOMC) amplified risk appetite. Large-scale net buying centered on top market cap stocks such as semiconductors, automobiles, internet, and secondary batteries led the KOSPI's strength."

The KOSDAQ closed at 701.21, up 1.78% (12.27 points) from the previous trading day. It started at 695.02, up 0.88% (6.08 points), and foreigners switched to buying, driving the index. Foreigners and institutions net bought 25 billion won and 5.2 billion won, respectively. Individuals were net sellers of 7.7 billion won.

All of the top 10 market capitalization stocks closed higher. Ecopro BM had the highest increase at +2.96%, followed by Celltrion Healthcare (+2.09%), Celltrion Pharm (+2.00%), Kakao Games (+1.93%), and L&F (+1.79%).

Han Jae-hyuk, a researcher at Hana Securities, analyzed, "The domestic stock market showed a similar trend to last November, when foreign demand continuously supported the market, resulting in overall strength."

Meanwhile, in the Seoul foreign exchange market, the won-dollar exchange rate closed at 1243.5 won, down 25.1 won from the previous trading day.