"Has the 'Short Selling Ban' Effect Already Ended?…KOSPI Starts with Over 1% Decline"

On the 7th, the KOSPI index started the day with a decline of over 1% immediately after the market opened. The previous day had seen a historic surge of 5.66% due to the short-selling ban, but the trend reversed in just one day.

As of 9:13 a.m., the KOSPI index stood at 2,469.79, down 32.58 points (1.30%) from the previous close. It had dropped as low as 2,456.44 shortly after the opening. Individual investors were net buyers alone with 146.1 billion KRW, while foreigners and institutions were net sellers of 98.9 billion KRW and 48.4 billion KRW, respectively.

The KOSPI opened down more than 1% on the 7th, falling to the 2,450 level. The index opened at 2,476.35, down 26.02 points (1.04%) from the previous session, and the decline is widening. Photo by Yonhap News Agency, taken at Hana Bank dealing room, Jung-gu, Seoul on the morning of the 7th.

Among the top market capitalization groups in the Korea Composite Stock Price Index market, stocks related to secondary batteries, which had seen large gains the previous day, were undergoing corrections. Samsung SDI was trading at 482,000 KRW, down 4.74% from the previous close, while LG Energy Solution (-4.05%) and POSCO Holdings (-4.02%) were also falling together.

Han Ji-young, a researcher at Kiwoom Securities, said, "The Korean stock market is currently in a phase where a unique supply-demand event, the short-selling ban, is exerting influence rather than external events. Considering that both markets experienced a historic surge in just one day, intraday volatility is expected to increase due to short-term profit-taking, so excessive chasing buying should be avoided." She added, "With the market awaiting U.S. Treasury auctions and remarks from Federal Reserve officials, the market is expected to experience increased intraday price volatility influenced by the supply-demand theme created by the short-selling ban, including short-term profit-taking and chasing buying."

At the same time, the KOSDAQ index was trading at 839.13, down 0.32 points (0.04%). The KOSDAQ index showed mixed movements, fluctuating up and down shortly after the opening. Individual investors were net buyers of 117 billion KRW, while foreigners and institutions were net sellers of 53.6 billion KRW and 52.8 billion KRW, respectively.

Among the top market capitalization groups in KOSDAQ, the "Ecopro brothers" continued their consecutive gains from the previous day. Ecopro BM was trading at 311,500 KRW, up 4.18% from the previous close. Ecopro also rose 7.49% to 890,000 KRW. On the other hand, L&F (-7.88%) and Rainbow Robotics (-4.00%) were declining in the early session.