Short Selling Resumption D+1 'KOSPI Mixed'... Individual Net Selling

On the first day of the partial resumption of short selling on the 3rd, the KOSPI index is displayed on the electronic board in the dealing room of Hana Bank in Euljiro, Seoul. Photo by Mun Honam munonam@

[Asia Economy Reporter Junho Hwang] On the second trading day since the resumption of short selling, the KOSPI is showing mixed trends from the start on the 4th. The downward pressure is increasing as individual investors have turned to net selling.

On this day, the KOSPI opened at 3,131.39, up 4.19 points (0.13%). However, as of 9:15 AM, it recorded 3,121.83, down 0.17%, turning negative. As of 9:35 AM, the KOSPI is at 3,114.12, down 0.42% (13.08 points). This appears to be the result of individual investors, who were net buyers early in the session, turning to net sellers. Individuals are currently net selling 89.4 billion KRW. Foreigners are also net selling 44.9 billion KRW, while institutions are net buying 134.6 billion KRW.

Among all stocks, 217 stocks showed gains while 626 stocks showed losses. The sectors that showed early gains included steel and metals, and distribution industries, which rose by around 1%. Following these, paper and wood, finance, food and beverage, and non-metallic minerals also showed upward trends.

Among the top market capitalization stocks, only Samsung Electronics showed an upward trend. As of this time, it is up 0.24% at 81,900 KRW. LG Chem (1.10%), NAVER (0.28%), Hyundai Motor (0.69%), Samsung SDI (1.25%), and Celltrion (1.20%) also showed gains.

The KOSDAQ briefly showed an upward trend during the session but soon turned downward. As of this time, the KOSDAQ is down 0.44% at 957.55. Foreigners and institutions are net buying 55.5 billion KRW and 11.6 billion KRW respectively, but individuals are net selling 67.4 billion KRW.

By sector, finance, transportation parts, broadcasting services, telecommunications services, and textiles and apparel are showing upward trends. Among the top market capitalization stocks, Pearl Abyss (0.36%), SK Materials (0.27%), HL Biopharma (0.63%), and CJ ENM (1.38%) are recording gains. On the other hand, similar to Celltrion, Celltrion Healthcare and Celltrion Pharm are showing declines, and Kakao Games and EcoPro BM are also on a downward curve.

Researcher Hainhwan Ha of KB Investment & Securities Research Center analyzed, "The resumption of short selling is identified as the cause of the stock market adjustment," adding, "The relatively large drop in the Korean stock market compared to global markets and the limited movement in the USD-KRW exchange rate support this judgment." He noted that if there are other causes, this short selling resumption event could serve as a benchmark to gauge how much impact it has on the market.

Researcher Ha added, "The current market, lacking external negative factors comparable to those in 2009 and 2011 when short selling was resumed, is judged to have already entered a bottoming phase."

Researcher Donggil Noh of NH Investment & Securities Research Center said, "The impact of the short selling resumption event on the direction of large-cap indices is expected to remain limited in the future," adding, "Before the short selling ban, the short selling transaction amount was around 1 trillion KRW based on KOSPI, while on the 3rd, the KOSPI trading volume was 33.6 trillion KRW, which is sufficient to absorb the short selling volume."

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