'Sell Korea' Foreigners' 570 Billion Won 'Massive Sell-off'... KOSPI Falls Below 2600 Level

Morning Rise and Afternoon Fall, Ultimately Below 2600
Foreigners' 'Sell Korea' with Net Sales of Over 500 Billion Won
Cosmetics and China-Related Stocks Strong Amid Index Decline

The KOSPI index closed lower after 7 trading days. Despite several positive factors such as the U.S. stock market continuously hitting new highs, China's large-scale economic stimulus measures, and the Korea Exchange's establishment of the 'Value-Up Index,' the market ultimately retreated.

[Image source=Yonhap News]

On the 25th, the KOSPI closed at 2,596.32, down 35.36 points (1.34%) from the previous session. It was a market characterized by a "strong start, weak finish." The KOSPI opened at 2,652.71, up 21.03 points from the previous day, reached an intraday high of 2,663.36 early in the session, and traded around the 2,630 level in the morning. However, selling pressure intensified in the afternoon, and the index ultimately fell below the 2,600 mark near the close. This ended a six-day consecutive rise that had lasted since the 12th. It was the first time in three trading days that the closing price fell below 2,600.

By investor type, individual investors and institutions bought 35.6 billion KRW and 549.5 billion KRW, respectively. However, foreign investors led the decline by net selling 572.3 billion KRW. Despite the "strong start, weak finish" market trend, foreign investors consistently maintained selling pressure throughout both the morning and afternoon sessions.

357 stocks closed higher, 518 stocks closed lower, and 59 stocks were unchanged. Among the top 10 stocks by market capitalization, only SK Hynix (1.10%) and LG Energy Solution (0.12%) ended higher, while the rest closed lower. Despite Nvidia rising about 4% overnight and the Philadelphia Semiconductor Index gaining over 1%, domestic semiconductor stocks showed little strength. Notably, KB Financial, which was excluded from the newly established 'Value-Up Index' by the Korea Exchange the previous day, experienced the largest decline, falling 4.76%. With the financial sector leader falling, some have raised questions about the selection criteria for the new index.

One highlight of the day was Chinese-related stocks, which gained attention due to China's economic stimulus measures. Particularly, cosmetics stocks, leading players in the 'K-Beauty' sector with significant influence in the Chinese market, surged. Amorepacific (9.04%) and LG Household & Health Care (5.35%), considered the two giants in the cosmetics industry, both rose more than 5%. AmoreG, the holding company of Amorepacific, also increased by 4.17%. Amorepacific, which had suffered a sharp decline due to weak second-quarter results in China, showed that its 'China exposure' remains significant, as reflected in the stock price movement. Domestic leading cosmetics ODM (Original Design Manufacturer) companies such as Cosmax (5.94%) and Jayjun Cosmetic (4.70%) also showed strong performance.

Ji-won Kim and Jeong-eun Lim, researchers at KB Securities, commented, "Disappointing selling pressure centered on stocks excluded from the Value-Up Index dragged the index down, resulting in a shift to a decline. In particular, financial stocks, which were expected to be the main beneficiaries of the Value-Up policy, saw heavy selling, while semiconductor stocks performed well but cautious sentiment remained ahead of Micron's earnings announcement scheduled for the 26th."

The KOSDAQ index closed at 759.30, down 1.05% (8.05 points) from the previous day.

By investor type, individual investors and foreign investors bought 35.9 billion KRW and 11.5 billion KRW, respectively, while institutions net sold 43.7 billion KRW.

780 stocks closed higher, 789 stocks closed lower, and 116 stocks were unchanged. Among the top 10 stocks by market capitalization, all except semiconductor-related stock Rino Industrial (0.15%) declined. Notably, major KOSDAQ biotech stocks such as Alteogen (-6.37%), Samchundang Pharm (-6.35%), and Hugel (-3.17%) experienced significant declines. The 'China-related stock fever' was also evident in KOSDAQ. Among 11 Chinese companies listed on KOSDAQ, 9 closed higher, 1 was unchanged, and 1 closed lower.