Will the 3000 Point Level Collapse Again... KOSPI's Decline Widens Amid Foreign and Institutional Selling

Fell to 3005 in the Morning... Foreigners and Institutions Net Sell 1.3 Trillion
Watching Interest Rate Direction, Volatility Likely to Increase for Now

On the 26th, when the KOSPI index started with a sharp decline, dealers were working in the dealing room of Hana Bank in Euljiro, Seoul. On that day, the KOSPI opened at 3,089.49, down 10.20 points (-0.33%) from the previous trading day, showing a downward trend. Photo by Moon Honam munonam@

[Asia Economy Reporter Minwoo Lee] The KOSPI, which started slightly lower, plunged sharply and is now at risk of falling below the 3000 mark again after two days. The rise in U.S. Treasury yields has led to foreign and institutional investors offloading shares, widening the decline.

As of 9:55 a.m. on the 26th, the KOSPI stood at 3013.04, down 2.80% (86.65 points) from the previous day. After opening slightly lower at 3089.49, the index rapidly widened its losses. Around 9:35 a.m., it dropped to 3005.02, nearly breaking below the 3000 level. This contrasts with the previous day’s roughly 3.5% gain, which had pushed it close to 3100.

The selling pressure from foreign and institutional investors appears to have dragged the index down. They net sold 589.2 billion KRW and 765 billion KRW worth of shares, respectively. Although individual investors net bought 1.3462 trillion KRW, it was not enough to prevent the index’s decline.

The KOSDAQ also fell 2.75% (25.60 points) to 910.61 at the same time. It too started slightly lower but quickly deepened its losses. At 9:36 a.m., it dropped as low as 906.73.

In the KOSDAQ market, foreign and institutional investors continued their joint selling spree. Foreign investors, who had been net buyers early in the session, turned to net selling with 32.5 billion KRW. Institutions sold 112.7 billion KRW. Meanwhile, individual investors net bought 155.9 billion KRW.

The sharp rise in the U.S. 10-year Treasury yield and the resulting steep decline in U.S. stock markets appear to have impacted the domestic market. On the 25th (local time), the three major U.S. indices?the Dow Jones Industrial Average (-1.75%), S&P 500 (-2.45%), and Nasdaq (-3.52%)?all fell consecutively. The Nasdaq’s drop was the largest since late January last year. This was due to the U.S. 10-year Treasury yield soaring to 1.5%, reaching as high as 1.614% during the session. This level is comparable to mid-February last year, before the widespread outbreak of COVID-19.

Haedahun Han, a researcher at SK Securities, explained, "Although Federal Reserve Chairman Jerome Powell denied it, the rise in U.S. Treasury yields and the resulting concerns over tightening acted as a pretext for profit-taking, increasing volatility. Liquidity remains abundant, but the direction of interest rates will significantly affect investor sentiment. Since individual investors are the main drivers of supply and demand, the increased volatility is expected to continue for the time being."

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