Decline Closes Amid Weakness in US Stock Market
Institutional Selling Also Continues
[Asia Economy Reporter Lee Jung-yoon] The KOSPI index closed lower, dropping nearly 1% due to concerns over tightening.
On the 17th, the KOSPI index closed at 2,451.21, down 24.27 points (0.98%) from the previous trading day. The index opened at 2,447.66, down 27.82 points (1.12%), and at one point narrowed the decline to record 2,471.51. However, as institutional selling continued, the market closed with a nearly 1% decline. Individual and foreign investors were net buyers, purchasing approximately 224.5 billion KRW and 119.4 billion KRW respectively, helping to defend against further index declines. Institutions alone were net sellers, offloading about 384.2 billion KRW.
Among the top market capitalization stocks, Samsung SDI fell the most, down 4.22%. This was followed by LG Chem (-3.91%), LG Energy Solution (-2.91%), Naver (-2.27%), Samsung Electronics (-1.73%), Samsung Biologics (-1.24%), SK Hynix (-0.97%), Hyundai Motor (-0.17%), and Kia (-0.13%). POSCO Holdings rose 1.52%. Kakao dropped 1.40%, falling to 11th place in market capitalization rankings.
By sector, declines were seen in Electrical & Electronics (-1.93%), Non-metallic Minerals (-1.59%), Services (-1.55%), Medical Precision (-1.53%), Pharmaceuticals (-1.31%), and Manufacturing (-1.29%). Conversely, Steel & Metals (1.78%), Construction (0.92%), Machinery (0.70%), Transportation & Warehousing (0.37%), and Finance (0.32%) showed strength.
Kim Seok-hwan, a researcher at Mirae Asset Securities, explained, "The U.S. January Producer Price Index (PPI) exceeded expectations, adding to inflation concerns and comments from Federal Reserve (Fed) officials about a 0.5 percentage point rate hike, reflecting the weak close in the U.S. stock market. Profit-taking selling expanded across major secondary battery and semiconductor stocks that had driven the domestic market's rise the previous day."
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. The higher-than-expected figures suggest inflation may persist longer than anticipated, and there are forecasts that the Fed will increase the benchmark interest rate by 0.5 percentage points at the March Federal Open Market Committee (FOMC) meeting.
Hawkish remarks from Fed officials continued. Loretta Mester, President of the Cleveland Federal Reserve Bank, stated, "At the last FOMC, we saw a compelling case for a 0.5 percentage point increase, contrary to market expectations," adding, "It will take time to stabilize prices, and there will be pain involved." James Bullard, President of the St. Louis Federal Reserve Bank, also said, "Inflation remains too high," and "I advocated for a 0.5 percentage point increase."
On the 16th (local time), 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.
On the same day, the USD/KRW exchange rate closed at 1,299.5 KRW, up 14.7 KRW. During the session, it rose to 1,303.8 KRW, surpassing the 1,300 KRW mark. This was the highest intraday level since December 20 of last year (1,305.00 KRW), nearly two months ago.
The KOSDAQ index closed at 775.62, down 9.09 points (1.16%) from the previous day. Individuals were net buyers of about 386.2 billion KRW, but foreigners and institutions were net sellers of approximately 210.4 billion KRW and 181.2 billion KRW, respectively.
Among the top market capitalization stocks, all but Osstem Implant (0.05%) showed declines. Notably, secondary battery-related stocks experienced significant drops. Ecopro plunged 7.74%, and L&F fell 5.74%. This was followed by Rino Industrial (-3.43%), HLB (-2.20%), Celltrion Healthcare (-1.56%), and Kakao Games (-1.48%). SM, which had been strong amid management disputes, fell 1.36%, marking its first decline in six trading days. Pearl Abyss (-0.78%) and Ecopro BM (-0.47%) also declined.
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