KOSPI Mixed... Tightening Concerns vs. Hanmi Summit

[Image source=Yonhap News]

[Asia Economy Reporter Junho Hwang] On the 24th, the KOSPI is showing mixed trends. It started lower amid growing concerns over liquidity tightening but has resumed an upward trend. This is analyzed as a result of the market reflecting factors such as the South Korea-US summit amid rising concerns over tightening due to inflation in the US.

On this day, the KOSPI opened at 3,155.91, down 0.51 points (0.02%). However, as of 9:22 AM, it is up 0.14% at 3,160.70. Individual investors are notably net buyers. Individuals are net buying 81.8 billion KRW, and foreigners are also buying about 9.5 billion KRW. Only institutions are net sellers with 90.7 billion KRW. Among all stocks, 272 are rising while 540 are falling.

By sector, the electric and gas industry, which is heavily influenced by the raw materials market, is up 1.48%. The machinery sector is also maintaining gains in the 1% range. Telecommunications, transportation equipment, warehousing and transportation, and financial sectors are also recording gains.

The KOSDAQ is in a downward trend. It started the session at 965.23, down 0.40 points (0.04%), and as of now, it is down 0.65% at 959.39. Individuals and foreigners are net buying 4.6 billion KRW and 4.2 billion KRW respectively, while institutions are net selling 6.7 billion KRW.

By sector, telecommunications equipment, internet, telecommunication services, computer services, and entertainment are showing upward trends, while all other sectors are declining. Among the top market cap stocks, EcoPro BM is up 1.50% at 176,100 KRW. HL Biopharma and CJ ENM are also up 0.16% and 0.13%, respectively.

On this day, remarks by Federal Reserve (Fed) officials, the US central bank, regarding tapering reduction appear to be influencing the market. As US inflation rises, the tightening pressure on Fed officials is increasing.

Accordingly, last week, Robert Kaplan, President of the Dallas Federal Reserve Bank, mentioned that discussions on tapering should begin, and Patrick Harker, President of the Philadelphia Fed, also stated that it might be better to start discussions early and gradually remove easing measures.

According to a recent survey by the New York Fed, major US banks expect tapering to begin in the first quarter of next year and the first rate hike to occur in the third quarter of 2023.

Sangyoung Seo, a researcher at Mirae Asset Securities Research Center, diagnosed, "With the weakening momentum of the Korean stock market, it is expected that rapid sector rotation will continue."

Kyoungmin Lee, a researcher in charge of investment strategy at Daishin Securities, analyzed, "Just before the South Korea-US summit, a Korea-US Business Roundtable was held, where direct investment plans and scales were disclosed, showing thorough preparation and quite concrete results. Attention should be paid to the fact that the alliance, which had been limited to diplomacy and security, has expanded to various fields such as economy, vaccines, and future-oriented industries."

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