Korean Stock Market's Upward Momentum Weakens... KOSPI Starts with a Sharp 1.6% Drop

KOSDAQ Also Starts Down 2%... All Sectors Decline
Domestic Market Returns Gains Amid US Stock Market Correction

On the morning of the 24th, employees are working at the Hana Bank headquarters in Jung-gu, Seoul. The KOSPI index started at 2,295.62, down 37.62 points (1.61%) from the previous session. [Image source=Yonhap News]

[Asia Economy Reporter Minwoo Lee] The KOSPI index started off down more than 1.6%. As COVID-19 is resurging worldwide and the U.S. stock market enters a correction phase, there is an analysis that the domestic stock market is also giving back its gains.

On the 24th, the KOSPI opened at 2295.62, down 1.61% (37.62 points) from the previous day. By 9:19 a.m., the decline had slightly narrowed, rising to 2302.62.

It appears that anxious individual investors are flooding the market with sell orders. In the KOSPI market, individuals were net sellers of 98.4 billion KRW. Foreigners and institutions were net buyers of 87.8 billion KRW and 14.3 billion KRW, respectively.

All sectors are in decline. The transportation equipment sector had the largest drop at 3.16%, followed by machinery (-2.45%), construction (-2.25%), and services (-2.16%).

Top market capitalization sectors are also underperforming. Hyundai Motor fell the most with a 3.0% drop. This was followed by Kakao (-2.6%), NAVER (-2.5%), LG Household & Health Care (-2.4%), Celltrion (-2.2%), Samsung SDI (-2.0%), and Samsung Electronics (-1.0%). However, SK Hynix and Samsung Biologics rose by 1.5% and 1.2%, respectively.

The KOSDAQ also opened lower. It started at 825.74, down 2.10% (17.71 points) from the previous day. By 9:19 a.m., it recorded 827.28.

Strong selling pressure was seen from individuals and institutions. Individuals and institutions were net sellers of 52.4 billion KRW and 7.3 billion KRW, respectively. Meanwhile, foreigners were net buyers of 61.2 billion KRW.

Almost all sectors are falling as well. The broadcasting services sector had the largest decline at 3.13%, followed by digital content (-2.89%), paper & wood (-2.88%), and telecommunications & broadcasting services (-2.68%). The internet sector was the only one to rise, up 0.34%.

All of the top 10 market capitalization stocks are in decline. Kakao Games had the largest drop at 4.4%, followed by Genexine (-3.5%), CJ ENM (-3.3%), EcoPro BM (-2.9%), and Alteogen (-2.8%).

With global stock markets entering a short-term correction, there is an analysis that the domestic market is also giving back the gains it had at the beginning of the month. Yesin Lee, a researcher at Shinhan Financial Investment, explained, "Money laundering suspicions involving major U.S. banks have slowed the rotation speed toward value stocks, and the resignation of Nikola’s founder along with the fading expectations after Tesla’s Battery Day are accelerating the sorting of growth stocks. Seasonal factors ahead of the Chuseok holiday, quarter-end rebalancing, and limited improvement potential in institutional demand due to increased fund redemptions are acting as additional cautionary factors alongside the global market correction trend."

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