KOSPI Starts Higher... Impact of Declining Market Interest Rates

KOSPI and KOSDAQ Start Higher
Interest Rate Decline and Economic Recovery Outlook
Previous Night KOSPI200 Futures Closed Higher

On the 23rd, with the KOSPI index starting higher buoyed by the positive momentum in the US stock market, dealers are working in the Hana Bank dealing room in Euljiro, Seoul. Photo by Moon Honam munonam@

[Asia Economy Reporter Junho Hwang] On the 23rd, the KOSPI started higher. This appears to be due to the reduced downward pressure on the stock market as the U.S. 10-year Treasury yield fell to the 1.6% range the previous day.

On this day, the KOSPI opened at 3,038.25, up 2.79 points, or 0.09%, from the previous day's closing price. As of 9:16 a.m., the KOSPI was trading at 3,051.26, expanding its gains to 0.52%. While individuals and foreigners were net sellers of 29.9 billion KRW and 6.7 billion KRW respectively, institutions supported the market by net buying 38.6 billion KRW.

By sector, pharmaceuticals showed gains in the 2% range, while transportation and warehousing, and steel and metals sectors rose by about 1%. Additionally, sectors such as paper and wood, manufacturing, construction, and chemicals also showed upward trends.

Among the top market capitalization stocks, Samsung Electronics rose 0.73% to 82,600 KRW, LG Chem increased 0.12% to 806,000 KRW, and Samsung Biologics traded up 1.12% at 723,000 KRW.

The KOSDAQ also opened higher at 956.10, up 0.72 points or 0.08% from the previous close. Currently, the KOSDAQ is at 961.65, up 0.66%. Foreigners are net buyers of 45.2 billion KRW, while individuals and foreigners show net selling intentions of 5.9 billion KRW and 22.4 billion KRW respectively.

Among the top market cap stocks, Kakao Games showed a decline of 0.93%, but Celltrion Healthcare, Celltrion Pharm, Alteogen, Pearl Abyss, Seegene, and EcoPro BM all expanded their gains. Notably, Seegene and Celltrion Pharm rose 5.12% and 3.12%, respectively.

The market's upward trend today is largely attributed to the decline in interest rates. The U.S. 10-year Treasury yield closed at 1.6973, down 1.69% the previous day. News that the central bank governor pushing for a rate hike in Turkey was dismissed caused a sharp drop in the Turkish lira, which in turn led to a rise in U.S. Treasury prices and a fall in yields. Additionally, frictions between the U.S. and China/EU, and remarks by Thomas Barkin, President of the Richmond Fed, about maintaining accommodative monetary policy also boosted investor sentiment toward safe assets.

Ahn Jae-kyun, a researcher at Korea Investment & Securities, said, "Given that the total auction volume for 2-, 5-, and 7-year bonds this week exceeds 180 billion USD, a full recovery in investment sentiment will likely require digesting this week’s auctions." He added, "Attention will focus on remarks by the Federal Reserve Chair on the 23rd (local time). If this is weathered, there appear to be no major factors that would cause a sharp rise in interest rates like in Q1, so the perception that all negative factors have been absorbed could strengthen."

Meanwhile, night trading of KOSPI 200 futures resumed from the 22nd. The previous day, KOSPI 200 futures opened at 412.35, dropped to 411.65 during the session, and closed at 414.60 (+0.53%).

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