Won-Dollar Exchange Rate Plummets 11 Won... Lowest in 10 Months
KOSDAQ Closes Up 1.82%
[Asia Economy Reporter Lee Jung-yoon] The KOSPI closed higher for the second consecutive trading day as foreign investors stepped up their buying. The U.S. Federal Reserve (Fed) raised the benchmark interest rate by 0.25 percentage points at the February Federal Open Market Committee (FOMC) meeting as expected, bringing a positive breeze to the domestic stock market.
On the 2nd, the KOSPI index closed at 2,468.88, up 19.08 points (0.78%) from the previous trading day. The index opened at 2,481.94, up 32.14 points (1.31%), but gave back some gains and fell to 2,454.60 during the session. However, the buying momentum from foreign investors grew, pushing the index back above the 2,460 level. Foreigners net bought about 555.5 billion KRW, while individuals and institutions sold approximately 356.7 billion KRW and 275.4 billion KRW, respectively.
The won-dollar exchange rate plunged sharply that day, closing at 1,220.3 KRW, down 11.0 KRW from the previous day's closing price. This was the lowest closing rate in 10 months since April 7 of last year.
Among the top market capitalization stocks, Kakao rose the most, gaining 3.70%. It was followed by Naver (2.92%), Samsung Electronics (2.75%), SK Hynix (2.19%), LG Energy Solution (2.11%), Samsung Biologics (1.00%), and Kia (0.29%). Meanwhile, LG Chem (-1.74%), Samsung SDI (-0.56%), and Hyundai Motor (-0.06%) declined.
By sector, the strongest performers were electric and electronics (2.30%), manufacturing (1.31%), services (1.28%), pharmaceuticals (0.83%), and textiles and apparel (0.80%). On the other hand, insurance fell more than 3%, followed by electricity and gas (-1.43%), finance (-1.25%), food and beverage (-1.01%), and distribution (-0.98%).
On the 1st (local time), the Fed raised the benchmark interest rate by 0.25 percentage points at its first FOMC meeting of the year, from 4.25-4.5% to 4.5-4.75%. The market interpreted Fed Chair Jerome Powell’s press conference, which acknowledged a slowdown in inflation, as dovish (favoring monetary easing). Powell said at the press conference, "There will be no rate cuts this year," but added, "We are in the early stages of disinflation." Regarding long-term inflation, he stated, "It is trending downward and following the Fed’s planned path." The U.S. stock market rose across the board, with the Nasdaq index showing a particularly notable increase, closing at 11,816.32, up 231.77 points (2.0%) from the previous day.
Kim Seok-hwan, a researcher at Mirae Asset Securities, explained, "The market rose as relief was reflected following the Fed’s announcement of a 0.25% rate hike and positive assessment of the inflation slowdown. In particular, the domestic stock market followed the Nasdaq technology stock-led rally, with the Philadelphia Semiconductor Index rising 5%, leading to strength in semiconductor, internet, and electric vehicle sectors."
He added, "Following Fed Chair Jerome Powell’s dovish remarks, the dollar index hit its lowest level since May last year, strengthening emerging market currencies. This also expanded foreign net buying inflows amid won appreciation."
Lee Kyung-min, a researcher at Daishin Securities, said, "Positive investment sentiment toward technology stocks continued due to the Nasdaq rally. Leading semiconductor and internet stocks showed strong gains, driving the KOSPI’s strength."
The KOSDAQ index closed at 764.62, up 13.66 points (1.82%). It started at 759.53, up 8.57 points (1.14%), and extended its gains. Foreigners and institutions net bought about 205 billion KRW and 186 billion KRW, respectively, while individuals net sold about 373.7 billion KRW.
Among the top market capitalization stocks, Pearl Abyss rose 4.84%, followed by EcoPro BM (4.40%), L&F (3.55%), EcoPro (2.02%), HLB (0.94%), Celltrion Healthcare (0.83%), and Kakao Games (0.32%). Meanwhile, Rino Industrial (-0.93%) and Osstem Implant (-0.05%) declined. JYP Entertainment remained flat.
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