KOSPI Falls for Third Consecutive Day... Benefiting Nuclear Power and Space Sectors

[Asia Economy Reporter Junho Hwang] On the 24th, the KOSPI closed lower due to foreign selling. Although cooperation plans related to semiconductors, secondary batteries, and vaccines were concretized at the Korea-US summit held last weekend, they did not have a significant impact. Instead, nuclear power and aerospace-related stocks surged.

On the 24th, the KOSPI closed at 3,144.30, down 12.12 points (0.38%) from the previous day. The KOSPI showed mixed trends in the early session and mostly remained flat afterward. From around 1 PM, the index declined and closed slightly lower.

Foreigners' selling pressure led the KOSPI's decline that day. Foreigners sold stocks worth 234.9 billion KRW on the KOSPI. In contrast, individuals and institutions bought stocks worth 176.7 billion KRW and 50.6 billion KRW, respectively. Program trading showed a net selling bias of 84.7 billion KRW.

Major sectors showed mixed trends. Electric and gas utilities, telecommunications, insurance, banking, food and beverages, machinery, and textiles and apparel rose, while medical precision, paper and wood, pharmaceuticals, steel and metals, electronics, and non-metallic minerals declined.

In particular, the Korea-US joint declaration announced on the 21st (local time) by President Moon Jae-in and US President Joe Biden included a commitment to jointly participate in nuclear power projects and develop cooperation in overseas nuclear power markets. As a result, nuclear power-related stocks Korea Electric Power Corporation and Doosan Heavy Industries & Construction rose 5.29% and 4.68%, respectively.

The news of the agreement to lift the Korea-US missile guidelines at the summit boosted stocks such as LIG Nex1 (9.75%), AP Satellite (6.94%), Korea Aerospace Industries (3.81%), and Hanwha Systems (3.75%).

Samsung Biologics, which will produce finished Moderna vaccines, and SK Bioscience, which agreed to collaborate with Novavax on vaccine development and production, showed strength during the session. However, their momentum faded toward the end of the session, with Samsung Biologics turning negative and SK Bioscience rising only 0.93%.

Seonghoon Seo, a researcher at Samsung Securities, evaluated, "There seems to be no momentum to stimulate market gains." He explained, "Recent corporate earnings have been good, but there has been no earnings improvement or upward revision of forecasts that would impress the market additionally. In the first half of this year, there was policy optimism from the Korea-US governments, but since it has mostly been exhausted, it is difficult to find upward momentum, which is intensifying the wait-and-see sentiment."

Regarding the impact of the Korea-US summit on the stock market, he said, "Investor sentiment is not good enough to be stimulated by the actual results of the Korea-US summit," adding, "For the index to rise further, more provocative factors need to emerge, but since the results were within expected levels, there was no reaction."

The KOSDAQ closed at 948.37, down 17.26 points (1.79%) from the previous trading day. Institutions led the KOSDAQ decline by selling stocks worth 60.7 billion KRW. Foreigners also sold stocks worth 6.9 billion KRW. Only individuals bought stocks worth 67.9 billion KRW, but it was insufficient to prevent the index from falling.

Among the top market capitalization stocks on the KOSDAQ, only HL Biotech rose. Among the declining stocks, Genexine, Alteogen, SK Materials, Soulbrain, and Seegene experienced significant drops.

In the Seoul foreign exchange market that day, the USD/KRW exchange rate closed at 1,127.10 KRW, up 0.10 KRW (0.01%) from the previous day.

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