Institutions Selling Off 1.5 Trillion VS Individuals Sweeping Up 2 Trillion... Tug of War in Sector Market

[Image source=Yonhap News]

[Asia Economy Reporter Lee Seon-ae] On the 4th, the domestic stock market, which started off lower, continued its sluggish trend as the decline widened. Losing momentum due to the rise in U.S. Treasury yields, foreign and institutional investors are holding back the KOSPI and KOSDAQ from turning upward. Individual investors alone are absorbing the volume they are offloading, resulting in a tug-of-war market. The domestic stock market, trapped in a box range with weakened upward momentum, is showing a stock-specific market.

As of 1:32 PM on the day, the KOSPI was down 1.63% at 3,032.77, and the KOSDAQ was down 1.28% at 918.93. The KOSPI started the day at 3,076.88, down 6.11 points (0.20%). The KOSDAQ opened at 929.09, down 1.71 points (0.18%). This was influenced by the decline in the New York stock market due to concerns over rising U.S. Treasury yields.

Institutions are offloading 1.5 trillion KRW worth of stocks, preventing the market from turning upward. Institutions are net selling 1.5084 trillion KRW in the KOSPI market and 104.7 billion KRW in the KOSDAQ market. Foreign investors are also net selling 528.1 billion KRW and 159.8 billion KRW in the respective markets. Only individual investors are net buyers, purchasing 2.0198 trillion KRW and 264.7 billion KRW in the two markets, respectively.

Most sectors are showing price declines. The majority of large-cap stocks are also in the red. Due to the lack of additional upward momentum, the market is showing a stock-specific trend. Among the large-cap stocks, POSCO is showing a clear upward trend. It surged to 318,000 KRW, marking a 52-week high. The rise in stock price is interpreted as driven by earnings expectations. POSCO's cumulative sales of lithium deposits at the 'Hombre Muerto' salt lake in Argentina, acquired in 2018, are expected to reach 35 trillion KRW. The Celltrion trio is also on the rise following the European Medicines Agency (EMA) news of emergency use review for the COVID-19 treatment drug Regkirona.

Seo Sang-young, a researcher at Kiwoom Securities, said, "The U.S. stock market fell again due to selling pressure mainly on tech stocks and some theme stocks with high value burdens, using the excuse of rising interest rates, which is a burden," adding, "The rise in U.S. Treasury yields could ultimately burden foreign investors' supply and demand in emerging market stocks." He further predicted, "Considering this, the Korean stock market is expected to continue a sector-differentiated market, similar to the characteristics of the U.S. market, after starting lower."

However, the prevailing view is that an upward market will unfold after the correction ends. Lee Eun-taek, a researcher at KB Securities, said, "The problem arises because the economy is too good, that is, concerns about tightening cause the correction," adding, "After digesting the uncertainty in early March, a market rebound is possible, and it is better to focus on the second half of the year rather than the first half."

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