On the 13th Ahead of the Second Impeachment Vote, KOSPI Fluctuates Around 2470 Level

Overnight US Stock Market Weakness Leads to Lower Start
Individuals Net Buyers in KOSPI and KOSDAQ
Experts Expect Continued Wait-and-See Approach

On the 13th, a day before the ruling on the second impeachment motion against President Yoon Suk-yeol, the KOSPI opened lower. The index started at 2473.75, down 8.37 points (0.34%) from the previous session, showing a downward trend before fluctuating around the 2470 level without finding direction. As of 9:46 a.m., the KOSPI was at 2482.51, up 0.39 points (0.02%) from the previous close. This is attributed to the overnight decline in the New York stock market due to inflation concerns and cautious sentiment ahead of the second impeachment vote. In the securities market, foreigners and institutions showed net selling dominance of 36.1 billion KRW and 22.9 billion KRW, respectively.

On the 13th, one day before the impeachment vote, the domestic stock market, which had been rising for three consecutive days, started slightly lower. Stock prices, exchange rates, and other indices are displayed in the dealing room of Hana Bank's headquarters in Euljiro, Seoul. Photo by Heo Young-han

Attention is focused on whether institutions will again act as the market’s savior. Institutions have continued net buying in the KOSPI market for 12 consecutive days since the 27th of last month. From the 6th to the 12th, right after the declaration of martial law, institutions purchased KOSPI stocks worth 23.066 trillion KRW, with pension funds accounting for 9.541 trillion KRW of net buying.

On this day, only individual investors are net buyers in the KOSPI market, purchasing 57 billion KRW. After consistently selling from the 6th to the 12th following the martial law declaration and lifting, individuals returned to the KOSPI market after six trading days. The fear of forced liquidation has somewhat eased, and with the market rebounding for three consecutive trading days, investor sentiment appears to be recovering.

At the same time, the KOSDAQ index is at 688.90, up 5.55 points (0.81%) from the previous close. The KOSDAQ started trading at 684.17, up 0.82 points (0.12%), and is expanding its gains. Despite political uncertainty, the index is showing an upward trend. Foreigners and institutions are net sellers by 46.1 billion KRW and 8.1 billion KRW, respectively, while individuals are net buyers of 73 billion KRW. Since the 11th, individuals have been supporting the KOSDAQ index by buying at low prices.

Lee Seong-hoon, a researcher at Kiwoom Securities, said, "Today, the domestic stock market is expected to take a breather following the U.S. market’s pause, centered on tech stocks, and the domestic market’s three consecutive days of gains. However, the price recovery trend is expected to continue, especially for stocks that had excessive declines relative to earnings after the martial law situation."

Meanwhile, individual investors who fell into panic selling after the martial law incident have been buying financial stocks intensively during this period. The purchase of financial stocks by individuals is interpreted as a judgment that despite strong earnings and value-up announcements, the stock prices had fallen excessively.

According to the Korea Exchange, among the top stocks purchased by individual investors from the 4th to the 12th, the day after the martial law declaration and lifting, financial stocks were prominently included. The top net purchased stock was KB Financial Group, with net buying of 301.6 billion KRW during this period. This was followed by Hana Financial Group (129.3 billion KRW), Shinhan Financial Group (94.8 billion KRW), and Woori Financial Group (51.1 billion KRW).

KB Financial Group was the second most sold stock by foreigners, showing opposite moves between foreigners and individuals. After the martial law incident, concerns that the value-up program might be deprioritized in government policy caused financial stocks, considered beneficiaries of the program, to waver. From the 4th to the 12th, KB Financial Group fell 8.8%, Woori Financial Group dropped 5.6%, and Hana Financial Group declined 2.6%. KB Financial Group’s stock price slid for four consecutive trading days from the 4th but rose for three consecutive days from the 10th as individual selling eased.

Experts expect the cautious stance to continue for a while due to overlapping concerns about U.S. inflation and political turmoil.

Kim Ji-won, a researcher at KB Securities, explained, "The market is more interested in the pace of rate cuts next year than whether there will be a rate cut in December. The continued signals of stagnation in U.S. inflation easing are a concern for the stock market. Although the domestic market has rebounded for three consecutive days, reflecting political risks in advance, the cautious stance is expected to persist due to the possibility of increased volatility."

This content was produced with the assistance of AI translation services.