Disappointment Over Slow Pace of US Interest Rate Cuts... KOSPI Starts Down Over 2%

Market Capitalizations All Decline Simultaneously
KOSDAQ Also Falls

The KOSPI opened down more than 2% on the 19th following the U.S. Federal Reserve's (Fed) outlook that the pace of interest rate cuts may be slower than the market expected.

As the U.S. Federal Reserve (Fed) hinted at slowing the pace of interest rate cuts, the New York stock market plunged sharply, and the domestic stock market also opened with a significant decline. The KOSPI started the session down 57.88 points (2.33%) at 2426.55, and the KOSDAQ also opened more than 15 points lower. Various indices are displayed in the dealing room of Hana Bank's Euljiro headquarters in Seoul. Photo by Heo Young-han

As of 9:14 a.m. that day, the KOSPI stood at 2,439.51, down 44.92 points (-1.81%) from the previous session. The index, which started at 2,426.55, down 57.88 points (2.33%) from the previous close, continued its downward trend.

This is interpreted as a result of the Fed's December Federal Open Market Committee (FOMC) regular meeting projecting fewer rate cuts than the market expected (four times), suggesting only about two rate cuts going forward, indicating a moderation in the pace of interest rate reductions. Moreover, Fed Chair Jerome Powell's reiteration during the press conference of his intention to slow the pace of future rate cuts further dampened investor sentiment. Following the FOMC, the three major U.S. stock indices all closed lower on the 18th (local time) in New York.

In the KOSPI market, individual investors are net buyers with 196.1 billion KRW, while foreigners and institutions are net sellers with 19.1 billion KRW and 185.2 billion KRW, respectively.

All of the top market capitalization stocks turned red. Only HD Hyundai Heavy Industries (0.62%) rose, while semiconductor stocks such as Samsung Electronics (-2.19%) and SK Hynix (-4.20%) fell sharply. Hyundai Motor (-2.08%), Kia (-2.65%), Celltrion (-2.16%), KB Financial Group (-2.06%), Shinhan Financial Group (-2.80%), and LG Energy Solution (-1.44%) also declined.

At the same time, the KOSDAQ index was at 684.47, down 13.10 points (-1.88%) from the previous session.

Individual and foreign investors were net buyers of 15.4 billion KRW and 27.4 billion KRW, respectively, while institutions were net sellers of 37.1 billion KRW alone.

All of the top market capitalization stocks are declining. Stocks such as Rino Industrial (-4.02%), Samchundang Pharm (-3.41%), Shinsung Delta Tech (-3.11%), and Ligachem Bio (-3.08%) are down by 3-4%, while EcoPro BM (-1.42%), EcoPro (-1.33%), and Alteogen (-2.69%) are also falling.