KOSPI Rises Above 3220... "Foreigners' Futures Trends Must Be Watched"

Mechanical Rebound Following Sharp Drop the Previous Afternoon
Improved Investor Sentiment Due to US Treasury Yield Decline
'Four Witching Hours' with Overlapping Futures and Options Expirations...Need to Monitor Foreign Futures Trends

On the morning of the 10th, employees are working in the dealing room at the Hana Bank headquarters in Jung-gu, Seoul. [Image source=Yonhap News]

[Asia Economy Reporter Minwoo Lee] After a somewhat sluggish start, the KOSPI has risen back to the 3220 level. The KOSDAQ also showed nearly a 1% increase, supported by simultaneous buying from foreigners and institutions. This improvement in investor sentiment appears to be due to the decline in U.S. Treasury yields and eased concerns over the Federal Reserve's tapering (reduction in asset purchases). However, since it is the 'Quadruple Witching Day,' when futures and options expire simultaneously, analysts suggest closely monitoring foreign futures trends.

As of 11:11 a.m. on the 10th, the KOSPI recorded 3,227.30, up 0.35% from the previous day. After opening slightly higher at 3,216.94, it initially dropped to 3,210.31 but rebounded to recover the 3,220 level. Foreigners and institutions net sold 98.3 billion KRW and 187.8 billion KRW, respectively. In contrast, individuals net bought 285 billion KRW.

The mechanical rebound following the sharp decline the previous afternoon, along with the drop in U.S. Treasury yields, is interpreted as having a positive effect on improving domestic stock market investor sentiment.

Sangyoung Seo, a researcher at Mirae Asset Securities, explained, "Depending on Canada's monetary policy and the heat of U.S. Treasury auctions, the U.S. 10-year Treasury yield briefly fell to the low 1.47% range during the session," adding, "With expectations that tapering signals will be unlikely at next week's Federal Open Market Committee (FOMC) meeting, investor sentiment has improved."

However, he added, "Since it is a day when futures and options expire simultaneously, sharp volatility may occur depending on the direction of foreign futures, so this should be closely monitored."

Unlike the early session, many sectors showed gains. The service sector (2.50%), medical precision (1.65%), and telecommunications (1.52%) led the increases. Meanwhile, banking (-1.36%), machinery (-1.31%), and construction (-0.98%) declined.

At the same time, the KOSDAQ was up 0.94% from the previous day, standing at 988.01. After opening slightly higher at 979.52, it has been gradually rising.

Contrary to the KOSPI, foreigners and institutions in the KOSDAQ market net bought 69.4 billion KRW and 16.5 billion KRW, respectively. Individuals net sold 74.9 billion KRW.

All sectors except finance (-0.11%) rose. Medical and precision instruments (2.28%), pharmaceuticals (1.64%), and software (1.63%) were among the top gainers.

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