KOSDAQ Rises 57.4P... Largest Increase in 22 Years
"Strong Rally in Stocks with High Short Selling Balances Like Secondary Batteries and Healthcare"
On the first day of the full ban on short selling, the KOSPI closed with the largest ever gain.
On the 6th, the KOSPI closed at 2,502.73, up 134.03 points (5.66%) from the previous trading day. This increase surpassed the previous record high of 127.51 points on March 24, 2020. In terms of percentage gain, it ranked 46th all-time, marking the highest since the 5.89% rise on March 25, 2020.
Choi Yujun, a researcher at Shinhan Investment Corp., explained, "In addition to the reduced tightening pressure due to the slowdown in U.S. October employment and service sector indicators last weekend, the short selling ban acted as an additional upward factor. Stocks with high short selling balances, such as secondary battery, healthcare, and some sensitive sectors, showed strong rallies."
By investor type, individual investors sold a net 935.4 billion KRW. Conversely, foreigners and institutions bought net amounts of 711.5 billion KRW and 221.9 billion KRW, respectively.
All sectors rose. Steel and metals surged 12.63%, while chemicals rose 8.16%. Additionally, electrical and electronics and manufacturing jumped more than 6%, and transportation and warehousing, securities, distribution, and machinery all increased by over 5%.
Among the top market capitalization stocks, Samsung Electronics closed at 70,900 KRW, up 1,300 KRW (1.87%) from the previous trading day. Secondary battery-related stock POSCO Future M closed at the upper limit, rising 29.93%, and LG Energy Solution surged 22.76%. POSCO Holdings, Samsung SDI, and LG Chem also rose more than 10%.
On the day, 744 stocks rose on the KOSPI market, including Kumyang and POSCO Future M, which hit the upper limit. 153 stocks fell without any hitting the lower limit, and 39 stocks remained unchanged.
The KOSDAQ also closed at 839.45, up 57.40 points (7.34%) from the previous trading day. This was the highest increase since January 22, 2001, when it rose 61.1 points. The percentage gain was the highest since March 24, 2020, when it rose 8.26%. The index surged so sharply that a program trading buy order suspension (sidecar) was triggered for the first time in about 3 years and 5 months.
By investor type, foreigners bought a net 469.4 billion KRW, while individuals and institutions sold net amounts of 486.6 billion KRW and 6.9 billion KRW, respectively.
Except for information devices, which remained flat, all sectors rose. Finance and general electrical and electronics jumped more than 20%. Chemicals, machinery equipment, and metals rose more than 6%, while digital content, pharmaceuticals, paper and wood, and IT components also increased more than 4%.
Similar to the KOSPI, secondary battery stocks surged among the top market capitalization stocks. Ecopro BM and Ecopro hit the upper limit, while POSCO DX and L&F rose more than 25%. HLB and Rainbow Robotics also rose more than 10%.
On the day, 1,253 stocks rose on the KOSDAQ, including four stocks such as Lightron that hit the upper limit. 316 stocks fell, and 51 stocks remained unchanged.
The securities industry expects the government's short selling ban to stabilize the domestic stock market. However, it analyzed that for the rebound trend to continue, inflows of buying power from individual investors are also necessary. Na Jeonghwan, a researcher at NH Investment & Securities, explained, "Due to short covering from the short selling ban and stabilization of global external variables, the Korean stock market will enter a calm phase."
Researcher Choi said, "While the short selling ban leads to short covering demand and short-term inflows from foreigners, the market influence may gradually decrease as two-way strategies are blocked. The expansion of individual investors' influence is important for extending the stock market trend reversal."
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