KOSPI Drops Below 3100 Due to Foreign and Institutional Selling... "Inflation Betting Strategy Remains Valid"

[Image source=Yonhap News]

[Asia Economy Reporter Park Jihwan] The KOSPI closed below the '3100 level' due to simultaneous selling pressure from foreigners and institutions. The rise in global bond yields led to notable declines in large growth stocks that had driven the market's strength. There was also advice that investment strategies betting on inflation, which is expected to benefit from rising interest rates, could be effective.

On the 22nd, the KOSPI closed at 3,079.75, down 27.87 points (-0.90%) from the previous day. Early in the session, the KOSPI rose to 3,142 supported by buying dominance from foreigners and institutions. However, concerns over rising global interest rates ultimately dampened the market. As global bond yields continued to rise, with yields increasing nearly 1.4%, foreigners and institutions switched to net selling, turning the market downward during the session. In the international financial market, the US 10-year Treasury yield rose to 1.39% per annum.

By investor type, foreigners sold 321 billion KRW, and institutions sold 458.2 billion KRW. Individuals supported the index decline by net buying 748.4 billion KRW.

Among the top 10 stocks by market capitalization, most showed weakness except for Hynix (2.63%). Samsung Electronics (-0.48%), LG Chem (-2.66%), NAVER (-2.89%), Celltrion (-2.83%), and Kia Motors (-2.20%) all declined. By sector, stocks benefiting from rising interest rates, such as insurance (4.23%), showed strength. Steel and metals (2.19%) also performed well due to rising prices of non-ferrous metals like copper.

The KOSDAQ closed at 954.29, down 10.82 points (-1.12%) from the previous day. Foreigners and institutions were net sellers of 89.4 billion KRW and 90.3 billion KRW respectively, while individuals were net buyers of 192.9 billion KRW.

Among the top market cap stocks, most showed weakness including Celltrion Healthcare (-2.72%), Celltrion Pharm (-2.34%), Pearl Abyss (-1.53%), and Seegene (-9.20%). Only HL Biopharma rose by 1.60%.

For the time being, analysis suggests that domestic stock markets will benefit from strategies betting on inflation and rising interest rates. Cho Ikjae, a senior researcher at Hi Investment & Securities, said, "The recent weakness in the domestic stock market is due to concerns over rising interest rates," adding, "The sector strength seen in the US market in energy, materials, consumer services, and financial stocks could have a similar impact on Korea."

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