[Asia Economy Reporter Lee Jung-yoon] The KOSPI index is showing a downward trend amid growing concerns over tightening by the U.S. Federal Reserve (Fed).
As of 9:19 a.m. on the 17th, the KOSPI index was recorded at 2,457.89, down 17.59 points (0.71%) from the previous trading day. The index, which started trading at 2,447.66, down 27.82 points (1.12%), narrowed its losses due to buying by individuals and foreigners. Individuals and foreigners purchased stocks worth approximately 32 billion KRW and 49.4 billion KRW respectively, while institutions were the sole net sellers with about 83.1 billion KRW sold.
Among the top market capitalization stocks, most showed gains. POSCO Holdings rose 2.13%, and LG Chem increased by 0.56%. On the other hand, Naver (NAVER) fell more than 2%, followed by Samsung SDI (-1.50%), LG Energy Solution (-1.28%), and Samsung Biologics (-1.24%). Kakao dropped 1.09%, falling to 11th place in market capitalization rankings.
By sector, steel and metals (1.27%), construction (0.10%), and transportation and warehousing (0.10%) rose. Conversely, services (-1.37%), electrical and electronics (-1.18%), pharmaceuticals (-1.16%), medical precision (-1.15%), and textiles and apparel (-1.03%) showed weakness.
On the 16th (local time), the U.S. stock market closed lower due to producer price index (PPI) exceeding expectations and hawkish remarks from Fed officials. The Dow Jones Industrial Average fell 431.20 points (1.26%) to 33,696.85, the large-cap S&P 500 dropped 57.19 points (1.38%) to 4,090.41, and the tech-heavy Nasdaq declined 214.76 points (1.78%) to 11,855.83.
The U.S. January PPI rose 6.0% year-over-year and 0.7% month-over-month, surpassing market expectations of 5.4% and 0.4%, respectively. This suggests that inflation may persist longer than anticipated, fueling forecasts that the Fed may raise the benchmark interest rate by 0.5 percentage points at the March Federal Open Market Committee (FOMC) meeting.
Hawkish comments from Fed officials reinforced these expectations. Loretta Mester, President of the Federal Reserve Bank of Cleveland, stated, "At the last FOMC, we saw a compelling case to raise rates by 0.5 percentage points, contrary to market expectations," adding, "It will take time to stabilize prices, and pain will be involved." James Bullard, President of the St. Louis Fed, also said, "Inflation remains too high," and "I advocated for a 0.5 percentage point increase."
At the same time, the KOSDAQ index also declined. It traded at 778.17, down 6.54 points (0.83%) from the previous day. Individuals purchased stocks worth about 98.4 billion KRW, but foreigners and institutions sold approximately 65.1 billion KRW and 22.2 billion KRW, respectively.
Among the top market capitalization stocks, most fell except for Osstem Implant, which rose 0.05%. Ecopro dropped more than 2.5%, followed by HLB (-2.20%), SM (-2.05%), L&F (-1.84%), and Rino Industrial (-1.71%).
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