KOSPI Barely Closes at 2610 Due to Massive Foreign Selling... Impact of 'Four Witching Days'

Samsung Electronics, 70,000 Won Intraday Price Also at Risk

[Image source=Yonhap News]

The KOSPI index narrowly closed at the 2610 level on the 8th amid heavy selling by foreign investors.

On that day, the KOSPI index closed at 2610.85, down 0.18% (4.75 points) from the previous session. This marked the first decline in four trading days since the 1st.

The KOSPI opened at 2609.21, down 0.24% (6.39 points) from the previous close, and during the session fell as low as 2595.33, briefly breaking below the 2600 mark.

The decline in the index was driven by foreign investors. Foreign investors sold a net 392.4 billion KRW worth of stocks, pulling the index down. Institutions and individuals were net buyers, purchasing 316.5 billion KRW and 67.5 billion KRW worth of stocks respectively.

In the Seoul foreign exchange market, the won-dollar exchange rate closed at 1,303.7 KRW, down 0.1 KRW from the previous session's close.

The domestic stock market was affected by profit-taking following the Bank of Canada (BOC)'s surprise interest rate hike on the 7th (local time), which revived investor concerns about tightening.

In particular, foreign investors, who have recently led the KOSPI's rise, showed a selling trend for the third consecutive trading day, exerting downward pressure on the index.

However, foreign investors stopped their two-day selling streak on Samsung Electronics, the leading stock in the domestic market, and net purchased 16 billion KRW worth on the day.

The day coincided with the "Four Witching Day," when futures and options for both the stock index and individual stocks expire simultaneously, increasing volatility in supply and demand and causing the market to fluctuate just before closing.

Kim Seok-hwan, a researcher at Mirae Asset Securities, analyzed, "The U.S. stock market declined due to anxiety over the June Federal Open Market Committee (FOMC) meeting following Canada's interest rate hike, which also weighed on the domestic market. However, increased foreign futures buying toward the end of the session amid the volatility caused by futures and options expiration helped partially reduce the index's losses."

Among the top 10 KOSPI stocks by market capitalization, all closed lower except SK Hynix (1.57%), Samsung Electronics Preferred (0.17%), and Hyundai Motor (0.15%). Samsung Electronics, which was threatened as a '70,000 KRW stock' after falling to 70,000 KRW during the session, closed down 0.14% at 70,900 KRW. Other decliners included LG Energy Solution (-2.15%), Samsung Biologics (-0.13%), LG Chem (-1.21%), Samsung SDI (-0.82%), NAVER (-2.20%), and POSCO Holdings (-0.13%).

By sector, transportation and warehousing (1.58%), insurance (1.41%), machinery (1.14%), distribution (1.10%), and construction (0.34%) closed higher, while services (-0.91%), textiles and apparel (-0.40%), pharmaceuticals (-0.36%), electrical and electronics (-0.35%), paper and wood (-0.33%), and chemicals (-0.27%) closed lower.

The KOSDAQ index closed at 876.13, down 0.52% (4.59 points) from the previous session. The index started at 878.86, down 0.21% (1.86 points), and fluctuated in a weak range throughout the session.

In the KOSDAQ market, foreign and institutional investors were net sellers of 233.1 billion KRW and 20.3 billion KRW worth of stocks respectively, while individuals were net buyers of 257 billion KRW.

The top 10 KOSDAQ stocks by market capitalization also closed mixed. JYP Entertainment (0.63%) and Kakao Games (0.63%) rose, while EcoPro BM (-0.93%), EcoPro (-0.60%), Celltrion Healthcare (-2.30%), L&F (-3.76%), Celltrion Pharm (-2.46%), and Pearl Abyss (-0.20%) declined. HLB and Osstem Implant closed flat.

By sector, medical precision instruments (0.93%), computer services (0.50%), food and tobacco (0.49%), textiles and apparel (-0.46%), and semiconductors (0.44%) closed higher, while software (-1.48%), general electrical and electronics (-1.32%), distribution (-1.30%), and other manufacturing (-0.94%) closed lower.

During the day, trading value on the KOSPI and KOSDAQ markets totaled 11.2594 trillion KRW and 8.8556 trillion KRW respectively.