KOSPI Falls for 2 Consecutive Days After 'Value-Up' Measures Announcement... Institutions Selling Off

Mixed Trends Around 2640, Closing Weak at 2625.05
Institutions Sell KOSPI for 3 Consecutive Days... KOSDAQ Also 'Selling Off'
Defense Stocks Struggle Amid Export Expansion Hopes

The KOSPI index fell for the second consecutive trading day. It retreated for two days in a row following the announcement of the 'Corporate Value-Up Program' the previous day.

[Image source=Yonhap News]

On the 27th, the KOSPI index closed at 2,625.05, down 22.03 points (0.83%) from the previous trading day. This marked a decline for two consecutive trading days. The KOSPI started the day at 2,654.76 and showed mixed trends around the 2,640 level in the morning before turning bearish in the afternoon.

By investor type, individuals bought 167.3 billion KRW, and foreigners purchased 34.8 billion KRW. In contrast, institutions sold 50.8 billion KRW. Foreigners have continued buying for four consecutive trading days, while institutions have been selling for three consecutive days. Individuals switched from selling to buying after four trading days.

By sector, all sectors except pharmaceuticals (0.89%), securities (0.33%), and machinery (0.23%) declined. Among the top 25 market capitalization stocks, only five closed higher: Samsung Electronics (0.14%), Celltrion (4.74%), Naver (0.05%), Shinhan Financial Group (1.57%), and Meritz Financial Group (0.35%). The remaining 20 stocks all ended lower. SK Hynix (-4.94%), Samsung C&T (-3.22%), and Hyundai Mobis (-3.11%) showed declines exceeding 3%.

Amid the overall downtrend, the strong performance of 'defense stocks' stood out. Domestic leading defense stocks such as Hanwha Aerospace (7.76%), which hit a new all-time high again, LIG Nex1 (1.56%), and Korea Aerospace Industries (0.19%) closed higher. This is interpreted as reflecting expectations for the passage of the amended Korea Export-Import Bank Act (KEXIM Act) in the National Assembly plenary session on the 29th. If the KEXIM Act is passed, the capital limit of KEXIM will increase from the current 15 trillion KRW to 25 trillion KRW. This will open up export opportunities for the defense industry, which had been hampered due to financial support limitations.

Lee Woong-chan, a researcher at Hi Investment & Securities, said, "The market is waiting for various economic indicators to be announced from late February personal consumption expenditure (PCE) inflation to early March, but the U.S. economic indicators, which began to improve from December, are unlikely to show a clear turning point yet." He added, "With reduced volatility, a stock-specific market will emerge, and even in a stock-specific market, the market style will shift from focusing solely on growth stocks to also considering value stocks." He further stated, "If there is a possibility of interest rate cuts in the second quarter, there is room for the stock market to rise once more."

The KOSDAQ index closed at 853.75, down 13.65 points (1.57%).

By investor type, foreigners sold 25 billion KRW, and institutions sold 153.6 billion KRW. Meanwhile, individuals were the sole buyers with 211.8 billion KRW purchased.

Out of the stocks, 299 closed higher, 1,292 closed lower, and 55 were unchanged. While most of the top market capitalization stocks declined, Alteogen (0.57%), Enchem (0.45%), Celltrion Pharm (9.03%), Shinseong Delta Tech (1.53%), and Hugel (2.33%) closed higher. AfreecaTV (5.21%) hit a 52-week high. This is interpreted as a positive impact following Twitch Korea's withdrawal as scheduled on the 27th.