[Asia Economy Reporter Kwon Jaehee] Despite the bankruptcy of the U.S. Silicon Valley Bank (SVB), the KOSPI index closed slightly higher. It appears that expectations for the easing of U.S. monetary tightening policies outweighed the negative impact of the SVB incident.
On the 13th, the KOSPI index closed at 2410.61, up 0.67% (16.01 points) from the previous trading day.
On that day, the index opened at 2400.45, up 0.24% (5.86 points) from the previous close, briefly fell below the 2400 level during the morning session, but turned upward in the afternoon session and ultimately held above 2400.
By investor type, foreigners and institutions were net buyers of stocks worth 18.6 billion KRW and 307.5 billion KRW respectively, driving the KOSPI's rise. In contrast, individual investors were net sellers of stocks worth 327.4 billion KRW.
The KOSPI showed a steady trend by rising slightly despite the SVB incident.
The improvement in investor sentiment is interpreted as being influenced more by expectations for the easing of the U.S. Federal Reserve's (Fed) tightening than by the risks from the SVB incident.
On that day, the Korean won to U.S. dollar exchange rate in the Seoul foreign exchange market closed at 1301.8 won, down 22.4 won from the previous trading day.
Seo Sang-young, head of the Media Content Division at Mirae Asset Securities, said, "Concerns related to the SVB incident stem from the possibility that if deposit withdrawals are halted, companies' financial activities could be disrupted. However, since the U.S. government intervened and announced that those who deposited money in SVB will be able to access their funds, the likelihood of concerns spreading is not high." He added, "However, issues such as the Biden administration's restrictions on semiconductor manufacturing equipment exports to China and the upcoming U.S. Consumer Price Index (CPI) announcement are expected to deepen cautious sentiment, resulting in a volatile market."
Furthermore, the market showed expectations that the SVB incident could serve as a catalyst for the Fed to ease its monetary tightening policy.
During the period of rising interest rates, the sharp decline in the value of U.S. Treasury bonds held by SVB and the increased burden of deposit interest, combined with the announcement of a large-scale fundraising plan, triggered this incident.
Lee Kyung-min, a researcher at Daishin Securities, diagnosed, "Uncertainty surrounding the U.S. SVB incident has diminished, and the U.S. futures market has shown a sharp rebound, improving risk appetite."
Among the top 10 KOSPI stocks by market capitalization, all stocks except Samsung Electronics Preferred (-0.19%) closed higher. These include Samsung Electronics (0.84%), LG Energy Solution (2.18%), SK Hynix (1.20%), Samsung Biologics (0.26%), Samsung SDI (0.14%), LG Chem (1.56%), Hyundai Motor (0.57%), NAVER (1.35%), and Kia (1.03%).
On the morning of the 13th, when news of the U.S. government's decision to fully protect SVB deposits was announced, the domestic stock market showed a slight rise followed by a decline. Photo by Younghan Heo younghan@
By industry, steel and metals (1.24%), electrical and electronics (1.09%), and services (1.03%) rose, while construction (-1.09%), paper and wood (-0.91%), and textiles and apparel (-0.85%) declined.
The KOSDAQ index also closed at 788.89, up 0.04% (0.29 points) from the previous close.
The index opened at 784.02, down 4.58 points (0.58%) from the previous day, dropped to as low as 771.03 during the morning session, but gradually narrowed the decline and turned slightly upward just before the close.
On that day in the KOSDAQ market, individuals and institutions were net sellers of stocks worth 55.7 billion KRW and 60 billion KRW respectively. Foreigners were the sole net buyers, purchasing stocks worth 144.6 billion KRW.
Among the top market capitalization stocks, SM, which concluded the acquisition competition between Kakao and HYBE, closed sharply down 23.48% compared to the previous day. Studio Dragon (-5.12%) and Rino Industrial (-0.57%) also closed lower. On the other hand, EcoPro (17.18%), Cheonbo (5.94%), and EcoPro BM (4.86%) closed higher.
On that day, the trading value in the KOSPI and KOSDAQ markets was approximately 7.6345 trillion KRW and 10.5115 trillion KRW, respectively.
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