Samcheonpi Broken After 26 Days... Growing Doubts Over Additional Liquidity

On the 24th, when the KOSPI index showed a flat trend in the early session, the KOSPI was displayed on the electronic board at the Hana Bank dealing room in Euljiro, Seoul. Photo by Moon Honam munonam@

[Asia Economy Reporter Junho Hwang] The KOSPI slipped below the 3000 mark for the first time in 26 days. Excluding holidays and the Lunar New Year break, it is the first time in 15 trading days. This is analyzed as a result of combined factors such as expectations of limited additional liquidity supply in the U.S. and the sluggish Chinese stock market. In conclusion, concerns about liquidity supply to the KOSPI appear to be increasing.

KOSPI slips below 3000 level

Jerome Powell, Chairman of the Federal Reserve Board

On that day, the KOSPI closed at 2995.32, down 74.77 points. Although there was mixed trading with fluctuations during the session, it ended the day 2.45% lower than the previous day. Individuals were net buyers with purchases amounting to 533.7 billion KRW, but foreigners and institutions were net sellers of 431.8 billion KRW and 127.2 billion KRW respectively, dampening individual buying momentum.

In particular, foreigners showed a selling tendency focused on large-cap stocks such as Samsung Electronics, LG Chem, Samsung SDI, and LG Electronics, while institutions were net sellers of LG Electronics, Celltrion, Samsung SDI, NAVER, and Kakao.

By sector, the non-metallic minerals sector fell by as much as 5.10%. Machinery, textiles and apparel, transportation equipment, and chemicals also showed declines in the 4% range. Construction, services, food and beverage, and insurance sectors saw drops in the 3% range.

Among the top 10 stocks by market capitalization, Samsung Electronics closed at 82,000 KRW, the same as the previous day. Meanwhile, NAVER fell 4.23%, Hyundai Motor 3.89%, and Samsung SDI 3.23%, showing significant declines. Kakao dropped 2.77%, and LG Chem fell 2.82% as well.

Sangyoung Seo, a researcher at Kiwoom Securities, analyzed, "With Jerome Powell, chairman of the U.S. Federal Reserve, the central bank, mentioning economic normalization in Congress the day before and expectations of restrictions on additional liquidity supply by the Fed, concerns about abnormal liquidity supply were heightened by Hong Kong's announcement of an increase in securities transaction stamp duty."

Sluggish Chinese stock markets add pressure

[Image source=Yonhap News]

The KOSDAQ also recorded a decline that day. It closed at 906.32, down 30.28 points, a 3.23% drop from the previous closing price. Individuals were net buyers with 39.1 billion KRW, but foreigners and institutions were net sellers of 26 billion KRW and 54.7 billion KRW respectively, leading to a downward trend.

Information devices, telecommunications equipment, transportation parts, electrical and electronics, paper and wood, chemicals, and IT components all showed declines in the 4% range. Software, distribution, machinery equipment, and semiconductors showed decreases in the 3% range. The only sector showing an upward trend that day was telecommunications services.

Among the top 10 stocks by market capitalization, Kakao Games rose 2.48%, and CJ ENM increased 0.36%, while the rest showed declines. In particular, Pearl Abyss fell 7.74%, Celltrion Healthcare dropped 4.27%, and Celltrion Pharm fell 3.55%.

Kyungmin Lee, a researcher at Daishin Securities, analyzed, "Given that the upward slope of our stock market is steeper than that of global markets, valuation burdens remain relatively, and the price gap narrowing phase continues. The sluggish Chinese stock markets are stimulating overall selling pressure, and the intraday rebound of the KRW/USD exchange rate is leading to foreign capital outflows."

Meanwhile, the KRW/USD exchange rate closed at 113.10 won, up 0.23% that day.

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