KOSPI Trading Volume Halved... 'Taking a Short Break'

KOSPI Trading Volume at 19.7898 Trillion Won on the 5th
Down 55% from 44.4377 Trillion Won on the 11th of Last Month
KOSPI Index Trend Determined When Trading Volume Exceeds 24 Trillion Won
Adjustment Market Expected for the Time Being Due to Poor Earnings and Supply-Demand Variables

[Asia Economy Reporter Ji Yeon-jin] The trading volume in the domestic KOSPI market has halved compared to the beginning of the year. The domestic stock market, which had shown a strong upward trend this year, is interpreted to have entered a correction phase.

According to the Korea Exchange on the 8th, the KOSPI trading volume on the 5th was 19.7898 trillion won, down 55.47% from 44.4377 trillion won on the 11th of last month. The KOSPI trading volume recorded 17.9288 trillion won on December 30 last year, then jumped to 25.0113 trillion won on the first trading day of this year, January 4, and soared to 44 trillion won within a week. Since then, the trading volume in KOSPI has been declining, dropping to 20.1471 trillion won on the 27th of last month. Although it slightly increased to 23.0078 trillion won and 24.3503 trillion won on the 28th and 29th of last month, when KOSPI sharply fell, it has remained in the 20 trillion won range this month. The KOSPI, which had declined at the end of last month, reclaimed the 3100 level this month, but the trading volume has not significantly increased. KOSPI surged to an intraday high of 3266.23 on the 11th of last month and has been alternating between declines and rises for four consecutive weeks. As of 9:40 AM on the day, KOSPI was at 3105.54, down 15.09 points (0.48%) from the previous day.

The securities industry analyzes that the recent trend in KOSPI trading volume is similar to the correction phase from August to October last year. During that period, KOSPI fluctuated around the 2450 level for three months, with trading volume reaching 20 trillion won in early August but dropping to the 10 trillion won range in September. Then, in early November, trading volume surged back to the 20 trillion won range, and KOSPI quickly rose. Lee Kyung-min, head of investment strategy at Daishin Securities, said, "The market direction and trading volume mostly align, and the recent drop in trading volume indicates that this is a correction phase. This time as well, when KOSPI trading volume exceeds 24 trillion won, the short-term trend will be determined depending on whether the market rises or falls."

However, the prevailing view is that the KOSPI correction phase may continue for some time. First, the fourth-quarter earnings of KOSPI-listed companies last year were weaker than expected. While more than 80% of 184 S&P 500 companies in the U.S. recorded earnings exceeding market expectations, only 43.4% of 106 KOSPI-listed companies surpassed market forecasts. Additionally, while the U.S. stock market hit new all-time highs last week, the Philadelphia Semiconductor Index closed lower due to weak sales from U.S. telecommunications company Qualcomm. This implies that the domestic stock market, which has a high semiconductor weighting, is unlikely to surge in the short term. Furthermore, the rebound in the won-dollar exchange rate and large-scale foreign futures selling continue to be supply-demand variables.

During last week's KOSPI rebound, foreigners took a neutral position and additionally net sold 1.37 trillion won in the futures market. Since KOSPI surpassed the 2800 level, foreign futures selling has increased to 6.4 trillion won. Lee said, "The recent clear upward trend in interest rates and foreign futures trading patterns are variables that will influence the market, and Korea's Lunar New Year holiday may also stimulate profit-taking sentiment. While we expect a mid- to long-term upward trend for KOSPI, it is still uncertain whether the short-term correction will end and the upward trend will resume."

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