Rising KOSPI and KOSDAQ Close on US Interest Rate Cut Expectations

The domestic stock market closed higher on the 1st, supported by foreign buying amid expectations of a US interest rate cut.

Amid the announcement of a September rate cut forecast by the U.S. FOMC (Federal Open Market Committee), the New York stock market rose across the board, while the KOSPI started the session up more than 20 points and the won-dollar exchange rate fell slightly. Employees are working in the dealing room of Hana Bank in Euljiro, Seoul. Photo by Heo Younghan younghan@

On that day, the KOSPI closed at 2,777.68, up 6.99 points (0.25%) from the previous trading day. The KOSPI opened at 2,787.27, up 16.58 points (0.60%). Foreign investors led the rally by purchasing 442 billion KRW worth of stocks alone. Individuals and institutions sold net amounts of 175.2 billion KRW and 300.6 billion KRW, respectively.

Among the top market capitalization stocks, Samsung SDI (4.54%), POSCO Holdings (3.13%), LG Energy Solution (2.93%), LG Chem (2.78%), Hyundai Motor (1.81%), and Shinhan Financial Group (1.51%) rose. Conversely, Samsung Life Insurance (-2.80%), Samsung C&T (-2.58%), Celltrion (-2.20%), Samsung Biologics (-1.39%), Samsung Electronics (-0.95%), and SK Hynix (-0.67%) declined.

Ji-won Kim, a researcher at KB Securities, analyzed, "The KOSPI was relieved by the Federal Open Market Committee (FOMC) meeting results of the Federal Reserve (Fed) and recovered risk appetite sentiment. Fed Chair Jerome Powell hinted at a possible rate cut next month, leading to a broad rise in the US stock market, which in turn helped the domestic market start higher." Samsung Electronics and SK Hynix fell on news that US export restrictions on China could limit the supply of high-bandwidth memory (HBM).

By sector, steel and metals (2.17%), chemicals (1.57%), paper and wood (1.46%), transportation equipment (1.45%), and securities (1.07%) rose. Conversely, telecommunications (-1.36%), pharmaceuticals (-1.13%), medical precision (-0.91%), food and beverages (-0.89%), and insurance (-0.76%) sectors declined.

The KOSDAQ index rose 10.38 points (1.29%) to 813.53 compared to the previous session. The index opened at 807.52, up 4.37 points (0.54%), and maintained its upward trend. Foreigners and institutions bought 33 billion KRW and 33.7 billion KRW worth of stocks, respectively, while individuals sold 62.4 billion KRW.

Among the top market capitalization stocks, Nexon Games surged 21.01%. This was due to the success of the new game "First Descendant" and positive earnings forecasts, setting a 52-week high. Enchem (5.56%), Ligachem Bio (4.38%), Silicon Two (3.84%), EcoPro BM (2.89%), and HLB (2.48%) also closed higher. On the other hand, Celltrion Pharm (-8.37%), Techwing (-5.69%), HPSP (-2.47%), and EO Technics (-0.63%) declined.

The KOSDAQ's gains expanded during the session due to a rebound in secondary battery stocks. EcoPro BM initially lost the top spot in KOSDAQ market capitalization to Alteogen due to weak earnings but reversed to a gain as bargain buying emerged.

Researcher Kim added, "July exports increased 13.9% year-on-year, marking the 10th consecutive month of growth, supported by strong semiconductor exports. Market attention is shifting to the US non-farm payroll data to be released on the 2nd. If employment weakness is confirmed, expectations for three rate cuts within the year are likely to strengthen."