Has the healthy breather passed... KOSPI consolidates around 3100 points

Effect of US Stimulus... Rising Expectations for 1Q Earnings Improvement
Strong Dual Buying by Foreigners and Institutions

On the morning of the 2nd, when the KOSPI started on an upward trend, dealers are conversing in the Hana Bank dealing room in Jung-gu, Seoul. [Image source=Yonhap News]

[Asia Economy Reporter Minwoo Lee] The KOSPI is consolidating above the 3100 level, which it regained after about 40 days. This reflects growing expectations for economic recovery due to the U.S. infrastructure stimulus package and favorable economic indicators.

As of 10:48 a.m. on the 2nd, the KOSPI recorded 3114.90, up 0.89% from the previous day. After a firm start at 3104.72, it has steadily maintained the 3100 level. This is the first time the KOSPI has surpassed 3100 since February 22. Around 9:21 a.m., it even reached 3121.58, breaking above the 3120 level.

Following the announcement on the 31st of last month (local time) of the U.S. government's large-scale infrastructure investment plan, which includes not only traditional infrastructure sectors such as construction and building materials but also 5G infrastructure, semiconductor development, and eco-friendly energy, a positive breeze has swept through global stock markets. In particular, the domestic market rose as expectations for surprise first-quarter earnings were also factored in.

Labor Gil, a researcher at NH Investment & Securities, explained, "Ahead of the first-quarter earnings season, earnings forecasts are continuously being revised upward due to expectations of economic recovery and base effects. Especially, semiconductors and automobiles are the leading sectors driving KOSPI earnings improvement this year, and positive signals from earnings expectations are confirmed in representative stocks such as SK Hynix and Samsung Electronics."

Lee Kyungsoo, head of the Meritz Securities Research Center, judged that the correction that occurred earlier this year was ultimately a healthy adjustment. He said, "Many viewed the market negatively due to the correction earlier this year, but it was ultimately a healthy 'breather'."

In the KOSPI market, buying by foreigners and institutions remains prominent. They net purchased 420.5 billion KRW and 395.4 billion KRW respectively, while individuals net sold 823.4 billion KRW.

By sector, Medical Precision (2.88%), Electric & Electronics (1.74%), Manufacturing (1.21%), and Transportation & Warehousing (0.53%) rose, whereas Construction (-1.18%), Steel & Metals (-0.60%), and Paper & Wood (-0.53%) declined.

The KOSDAQ showed a somewhat sluggish performance. At the same time, it was up 0.29% from the previous day at 968.90. After opening at 967.56, it briefly surpassed 970 in the morning but then fell back to the 960 range.

Unlike the KOSPI market, individuals and institutions bought 66.5 billion KRW and 9.3 billion KRW respectively, while foreigners net sold 58.6 billion KRW.

Many sectors rose. The Publishing & Media Replication sector had the largest gain at 2.84%, followed by Semiconductors (1.98%), Finance (1.35%), and IT Hardware (1.23%). Distribution (-0.84%) and Textiles & Apparel (-0.79%) declined.

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