Strong US Nonfarm Payrolls
Investor Sentiment Weakens Amid Hawkish Fed Comments
[Asia Economy Reporter Hwang Yoon-joo] On the 6th, the KOSPI and KOSDAQ started lower. Following the decline in US tech stocks and the release of sell orders on the 3rd (local time), the Korean stock market is also experiencing continued 'selling' pressure from foreigners and institutions. The strong US employment data raised concerns that the tightening stance may continue, and the weak performance of major tech stocks in the US market has dampened investor sentiment.
As of 10:08 AM, the KOSPI is trading at 2462.41, down 0.73% (17.99 points) from the previous trading day. The KOSPI opened at 2461.82, down 0.75% (18.58 points) today.
Due to the combined selling pressure from foreigners and institutions, the index fell to as low as 2445.00 (-1.43%) during the session. Foreigners and institutions are net selling 43.7 billion KRW and 218.7 billion KRW, respectively. Individual investors alone are net buying 256.7 billion KRW. However, in the futures market, foreigners and institutions are buying 118 billion KRW and 156.8 billion KRW, respectively.
Among the top market capitalization stocks, only Samsung Biologics +0.25%, Samsung SDI +0.14%, and Kia +0.56% are on the rise. The top three market cap stocks are down by about 1%. Samsung Electronics is down 1.72%, trading at 62,700 KRW. LG Energy Solution and SK Hynix are also down 1.72% and 1.12%, respectively. LG Chem is down 1.04% as well.
The reason for the decline in KOSPI and KOSDAQ is concerns that the tightening stance may continue as US employment data came out stronger than expected. The US Department of Labor announced that nonfarm payrolls for January were 517,000, nearly three times the forecast (185,000) and about twice the previous month (223,000). The unemployment rate also improved to 3.4%. Hourly wages showed a downward stabilization from 4.9% year-on-year to 4.4%, while weekly working hours increased from 34.4 to 34.7 hours.
Seo Sang-young, head of Mirae Asset Securities, said, "The US stock market's late-session profit-taking triggered by the strong dollar and sharp rise in interest rates will weigh on the Korean stock market," adding, "After the KOSPI's lower start, rather than seeking a rebound, the likelihood of profit-taking is high, so the index is expected to show a weak performance."
As of 10:23 AM, the KOSDAQ is at 762.07, down 0.62% (4.72 points) from the previous trading day. The KOSDAQ opened at 763.66, down 0.41% (3.13 points) today. Foreigners and institutions are selling 62.4 billion KRW and 58.6 billion KRW, respectively, while individual investors are buying 133 billion KRW alone.
The top market capitalization stocks show mixed trends. Battery stocks stand out with strong performance. EcoPro BM, the largest KOSDAQ market cap stock, is up 3.59%, L&F +0.47%, and EcoPro +6.54%. Osstem Implant is also up 0.21%. On the other hand, game stocks such as Kakao Games -2.30% and Pearl Abyss -2.16% are weak. HLB is down 3.28%, the largest decline.
NH Investment & Securities evaluated, "The stock market is characterized by excessive valuation burdens relative to fundamentals and persistent turnaround expectations."
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