[Weekly Market Review] Concerns Over COVID Resurgence... Individual Investors Step In for Bargain Buying

[Asia Economy Reporter Oh Ju-yeon] Due to concerns over the novel coronavirus infection (COVID-19) and worsening investor sentiment, the KOSPI fell below the 2300 level on August 20 during the third week of August (18-21), giving up all the gains from the previous week. However, individual investors once again stepped in to defend the index by buying stocks at low prices. Although this was a rebound buying following the sharp decline, it is predicted that cautious sentiment will prevail ahead of the possibility of further COVID-19 spread and major global events.

According to the Korea Exchange on the 22nd, from August 18 to 21, individuals net purchased stocks worth 868.9 billion KRW in the KOSPI market, while foreigners and institutions sold stocks worth 274 billion KRW and 580.6 billion KRW, respectively.

The top stock in net purchases by individuals was SK Hynix (395.6 billion KRW). SK Hynix has experienced stock price fluctuations due to the deteriorating DRAM market conditions. On August 20, it was even pushed out of the second place in market capitalization it had held since 2017. The stock price dropped from the 80,000 to 85,000 KRW range in July to the low 70,000 KRW range in August, shrinking the market cap from 69 trillion KRW at the beginning of the year to the 52 trillion KRW range. On August 20, the stock price fell intraday to 71,300 KRW, marking a decline of about 12.8% just this month. Although it rose by over 3% on the 21st to reclaim the second place, the stock price still remained in the 70,000 KRW range. It is interpreted that individual investors viewed this price drop as a buying opportunity and increased their holdings.

Following that, Samsung Electronics (134.4 billion KRW), Hyundai Motor (114.2 billion KRW), and NCSOFT (87.8 billion KRW) were among the top net purchases by individuals, showing a concentration of buying in large-cap stocks.

Additionally, rather than betting on a decline in the index, individuals placed more weight on an increase by heavily buying 'KODEX Leverage.' During the same period, individuals purchased nearly 64 billion KRW worth of KODEX Leverage, ranking sixth in net purchase volume.

The KOSDAQ index also fell below the 800 level, but individuals placed more emphasis on a rebound than further decline. Individuals bought 31.1 billion KRW worth of KODEX KOSDAQ150 Leverage, placing it within the top 10 net purchased stocks.

Meanwhile, foreigners focused their purchases on Samsung Electronics (85.9 billion KRW), NAVER (70 billion KRW), SK Telecom (63.4 billion KRW), LG Electronics (58.8 billion KRW), KODEX 200 (52.3 billion KRW), and Kakao (36.7 billion KRW).

Institutions bought LG Chem (110.9 billion KRW), Kakao (88.4 billion KRW), LG Electronics (54.6 billion KRW), NAVER (53.6 billion KRW), and Samsung SDI (48.5 billion KRW).

The global financial market next week is expected to focus on the speech by Jerome Powell, Chairman of the U.S. Federal Reserve (Fed), at the Jackson Hole meeting.

Seo Sang-young, a researcher at Kiwoom Securities, stated, "At the Jackson Hole Conference on the 27th and 28th, Chairman Powell is expected to comment on the Fed's monetary policy," adding, "The market expects positive remarks regarding the revision from target inflation to average inflation rate, yield curve control (YCC) policy, and related matters." He also added, "Market changes are anticipated depending on the content of the speech."

The domestic increase in COVID-19 cases is also considered a variable for the stock market. Lee Jae-sun, a researcher at Hana Financial Investment, said, "Next week, the domestic stock market is expected to have a prevailing cautious sentiment ahead of the possibility of further COVID-19 spread and major global events," adding, "A prerequisite for reducing market volatility is the lowered likelihood of the government announcing social distancing level 3 due to a slowdown in the spread."

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