KOSPI and KOSDAQ Both Fall Over 1% Amid Institutional and Foreign Net Selling

[Asia Economy Reporter Minji Lee] As institutions and foreigners increased their net selling, both the KOSPI and KOSDAQ indices are showing a downward trend.

At 10:28 AM on the 28th, the KOSPI was at 3190.42, down 0.78% (25 points) from the previous trading day. The index opened at 3217.21, up 0.06% (1.79 points) from the previous day, but soon slipped below the 3200 level. Looking at investor trends, foreigners and institutions net sold stocks worth 215.7 billion KRW and 240.7 billion KRW respectively. Individuals were the only buyers, purchasing stocks worth 457.4 billion KRW.

Among the top market capitalization stocks, LG Chem (0.11%), Hyundai Motor (0.45%), and Celltrion (0.91%) rose. On the other hand, Samsung Electronics (-0.72%), SK Hynix (-2.59%), and Kakao (-1.65%) declined.

During the same period, the KOSDAQ index was at 1006.85, down 1.39% (14.16 points) from the previous trading day. The index opened at 1021.13, up 0.01% (0.12 points) from the previous day, but quickly turned downward and is barely holding above the 1000 level. Looking at investor trends in the KOSDAQ market, individuals alone bought stocks worth 176.4 billion KRW, while foreigners and institutions sold stocks worth 87.1 billion KRW and 66.7 billion KRW respectively.

All of the top market capitalization stocks showed a downward trend. SK Materials fell 4.02%, and others such as Genexine (-3.14%), EcoPro BM (-2.59%), Pearl Abyss (-1.85%), and Kakao Games (-1.42%) also declined.

Seosangyoung, a researcher at Mirae Asset Securities, said, “After the U.S. stock market closed, Alphabet showed an upward trend with good earnings announcements, but Microsoft showed the opposite. This indicates that profit-taking is occurring for stocks that do not exceed market expectations, so attention should be paid to sectors with rapid earnings improvement in the domestic stock market.”

Short Selling Resumption... Caution Needed for Companies with High Loan Balance Ratios and Poor Earnings

With the resumption of short selling scheduled for the 3rd of next month, special caution is expected for companies with high short selling loan balance ratios but limited earnings growth. Typically, stocks of companies with simultaneous increases in short selling and loan balances have shown relatively poor performance.

Compared to last month, the loan balance ratio (loan balance amount/market capitalization) of KOSPI 200 and KOSDAQ 150 decreased by 0.13 percentage points. Among these, sectors with the largest increase in loan balance ratios were telecommunications (0.8 percentage points), media (0.6 percentage points), essential consumer goods (0.49 percentage points), and IT home appliances (0.43 percentage points). Conversely, sectors with the largest decrease in loan balance ratios were shipbuilding (-1.15 percentage points), cosmetics and apparel (-0.91 percentage points), and IT hardware (-0.57 percentage points).

Researcher Yum Myunggan of Mirae Asset Securities advised, “Since naked short selling is not allowed in the domestic stock market, securities lending transactions are essential for short selling. Because there is a strong correlation between loan balances and short selling, changes in loan balances should be closely monitored.”

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