KOSPI Starts Down Over 1% on 'Hawkish Powell' Remarks... Exchange Rate Surges Over 10 Won

On the 8th, the KOSPI index is showing a decline of over 1%.

As of 9:11 a.m. that day, the KOSPI stood at 2,435.43, down 27.92 points (1.13%) from the previous session. This follows hawkish remarks from Jerome Powell, Chairman of the U.S. Federal Reserve (Fed), suggesting a 'big step' (a 0.5 percentage point increase in the benchmark interest rate), which led to a decline in the U.S. stock market overnight.

In the stock market, individual investors are net buyers with 152.6 billion KRW, while foreigners and institutions are net sellers with 47.8 billion KRW and 106.1 billion KRW, respectively.

Most of the top market capitalization groups are also in decline. Samsung Electronics is trading at 60,200 KRW, down 0.82% from the previous session. Secondary battery-related stocks such as LG Energy Solution (-2.12%), Samsung SDI (-4.16%), and LG Chem (-3.11%) are showing relatively large drops.

Han Ji-young, a researcher at Kiwoom Securities, said, "Powell's remarks during this congressional testimony were more hawkish than the market expected, so we need to keep the possibility of a 50 basis point (bp) hike in March open." However, she added, "It is important to remember that the fundamental reason for the heightened tone was the January employment and inflation surprises," emphasizing, "Along with the Fed's data-dependent stance, it is notable that the U.S. stock market did not experience further sharp declines after the initial 1% drop at the start of trading."

Regarding the domestic stock market, the researcher advised, "Since foreign demand, which is sensitive to the macro environment, may be vulnerable in the short term, the influence of individual investors is expected to increase, leading to a stock market centered on small and mid-cap stocks and theme stocks." She also cautioned, "Growth stocks, which have recently shown relative strength due to industry-specific and demand issues, need to prepare for increased price volatility due to the unfavorable macro environment of rising interest rates."

The KOSDAQ index is also falling. At the same time, the KOSDAQ recorded 810.26, down 5.50 points (0.67%). Similar to the stock market, individual investors are net buyers with 39.8 billion KRW, while foreigners and institutions are net sellers with 25.3 billion KRW and 11.6 billion KRW, respectively.

The top market capitalization groups in KOSDAQ show mixed trends by stock. Celltrion Healthcare (0.48%), L&F (2.45%), and EcoPro (2.74%) are on the rise, while HLB (-5.40%) and Kakao Games (-1.20%) are declining.

Meanwhile, in the Seoul foreign exchange market, the won-dollar exchange rate is trading at 1,316.5 KRW, up 10.50 KRW from the previous closing price. It surged nearly 18 KRW in early trading before the increase narrowed somewhat.