Ahead of US FOMC Announcement, Caution 'Reflected'... KOSPI Retreats to 3040

[Image source=Yonhap News]

[Asia Economy Reporter Ji Yeon-jin] On the 17th, the domestic stock market is slightly declining amid a wait-and-see stance ahead of the U.S. Federal Open Market Committee (FOMC) decision. While the prevailing view is that the FOMC will maintain its economic stimulus policy, there is an analysis that persistent caution regarding interest rate hikes has surfaced.

The KOSPI index was trading at 3,043.85, down 25.03 points (0.82%) from the previous day as of 10:25 a.m. Individual investors are net buying about 452.2 billion KRW, while foreigners and institutions are net selling 240.6 billion KRW and 224 billion KRW, respectively. The index started trading at 3,067.76, up 0.59 points (0.06%) from the previous day, but turned downward within 20 seconds of the opening and widened its losses.

Among the top market capitalization stocks in KOSPI, Naver (NAVER) and Kakao rose by 0.6% and 0.9%, respectively, while most stocks showed a downward trend. In particular, LG Chem, which plunged sharply after Volkswagen announced its main electric vehicle battery transition plan the previous day, fell 2.81% from the previous day, and Samsung SDI dropped 3.53%. However, SK Innovation remained flat. Samsung Electronics (-0.72%), SK Hynix (-1.07%), Hyundai Motor (-1.50%), Samsung Biologics (-1.77%), and Celltrion (-1.52%) also declined.

Lee Jin-woo, head of investment strategy at Meritz Securities, said, "Looking at the U.S. stock market yesterday, Treasury yields fell but reversed to rise during the session, and tech stocks gave back early gains, reflecting unstable sentiment. Both recently surged cyclical stocks and tech stocks fell, reflecting caution toward the FOMC."

At the same time, the KOSDAQ index recorded 937.28, down 3.39 points (0.37%) from the previous day. Individual investors were net buyers of about 172.1 billion KRW, while foreigners (-69.9 billion KRW) and institutions (-85 billion KRW) continued their selling trend.

Among the top market capitalization stocks in KOSDAQ, only Kakao Games (0.59%) and Seegene (2.21%) showed gains. In Seegene's case, the spread of COVID-19 variants appears to have reflected improved performance of its main product, diagnostic kits.

On the other hand, KOSDAQ leaders such as Celltrion Healthcare (-1.80%) and Celltrion Pharm (-1.57%), as well as Pearl Abyss (-2.55%), SK Materials (-2.45%), and EcoPro BM (-3.97%) showed weakness.

Seo Sang-young, a researcher at Kiwoom Securities, said, "Considering the increased uncertainty ahead of the FOMC, a sector-differentiated market will continue, changing according to individual stock issues amid a wait-and-see stance. In the Korean stock market, stocks without clear earnings improvement may see increased selling pressure."

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