'Increased Caution Over Employment Weakening'... KOSPI and KOSDAQ Close Lower

KOSPI Down 1.21%, KOSDAQ Down 2.58%
"Disappointment and Caution Simultaneously Triggered by Weak US Employment Data"

On the 6th, the KOSPI index closed lower as investors' disappointment and risk aversion simultaneously acted following the release of sluggish U.S. employment data.

That day, the KOSPI closed at 2,544.28, down 31.22 points (1.21%) from the previous day. The KOSPI opened at 2,576.66, up 1.16 points (0.05%), but soon turned downward. Foreigners sold 266.2 billion KRW worth of shares, while institutions and individuals net bought 83.5 billion KRW and 166.9 billion KRW worth, respectively.

Seoul Euljiro Hana Bank Dealing Room. Photo by Younghan Heo younghan@

Among the top market capitalization stocks, Samsung Biologics (3.21%), Celltrion (1.70%), Shinhan Financial Group (1.60%), Hyundai Mobis (1.18%), and Samsung Electronics Preferred Shares (0.18%) closed higher. On the other hand, most stocks such as POSCO Future M (-7.89%), Samsung SDI (-6.16%), LG Energy Solution (-3.66%), POSCO Holdings (-3.65%), LG Chem (-3.11%), Samsung C&T (-2.13%), and SK Hynix (-1.88%) declined.

By sector, only pharmaceuticals (1.80%) and telecommunications (0.49%) rose. Most sectors including electric and gas utilities (-2.94%), steel and metals (-2.86%), textiles and apparel (-2.69%), distribution (-2.50%), chemicals (-2.17%), and non-metallic minerals (-1.89%) fell.

Ji-won Kim and Jeong-eun Lim, researchers at KB Securities, said, "The decline was driven by simultaneous disappointment and caution over weak U.S. employment data. U.S. private employment showed a significant slump, and concerns about the nonfarm payrolls report scheduled for release tonight have spread." They added, "Next week, volatility may increase due to the U.S. August Consumer Price Index and Producer Price Index, the European Central Bank monetary policy meeting, and the U.S. presidential candidates' TV debate."

They also noted, "Domestic policy uncertainties (financial investment income tax) and supply-demand gaps during the holiday period are also factors limiting investor sentiment," and advised, "Considering heightened uncertainties, economic concerns, and weak supply-demand, a conservative approach is necessary."

The KOSDAQ index recorded 706.59, down 18.69 points (2.58%) from the previous session. The index opened at 725.88, up 0.60 points (0.08%), but soon plunged into a downtrend. Foreigners and institutions sold 85.8 billion KRW and 4.8 billion KRW worth, respectively. Individuals were the sole buyers, purchasing 82.6 billion KRW worth.

Among the top market capitalization stocks, Pharma Research, which attracted about 200 billion KRW in investment from a European private equity fund, showed strength with a 4.83% rise. Classys (3.89%), Hugel (2.11%), Pearl Abyss (1.81%), and Celltrion Pharm (1.67%) also closed higher. Meanwhile, Enchem (-8.06%), EcoPro (-6.93%), Samchundang Pharm (-6.49%), EcoPro BM (-5.39%), EO Technics (-4.89%), Rainbow Robotics (-2.97%), and HPSP (-2.96%) declined.