Growing Expectations for Economic Normalization... KOSDAQ Hits New Highs for 3 Consecutive Trading Days

[Image source=Yonhap News]

[Asia Economy Reporter Ji Yeon-jin] On the 5th, the domestic stock market rose alongside global economic recovery expectations. The KOSDAQ index continued its record-high rally with simultaneous buying by foreigners and institutions, while the KOSPI also closed higher due to institutional buying.

The KOSPI index closed at 3,293.21, up 11.43 points (0.35%) from the previous session. The index showed an upward trend from the early session as global economic recovery expectations were reflected, following the U.S. stock market hitting an all-time high last weekend. Individual investors realized profits and sold a net 262.5 billion KRW worth of shares that day. In contrast, institutions bought a net 263.3 billion KRW, and foreigners, who had been net sellers during the session, increased their purchases just before the close, recording a net buy of 1.9 billion KRW.

The market showed strength centered on large-cap stocks (0.43%), with transportation and warehousing (3.31%) and pharmaceuticals (2.30%) particularly strong. HMM recorded a rise of over 7% on expectations that the container boom will continue long-term. Shinpung Pharmaceutical surged 15.60% amid concerns over the COVID-19 Delta variant and hopes for the development of a COVID treatment.

Among the top market capitalization stocks, Celltrion (2.63%) showed the most notable increase, and Samsung Biologics also rose 1.40%. LG Chem increased by 2.47%. Additionally, Samsung Electronics (0.50%) and SK Hynix (0.41%) showed slight gains. On the other hand, Kakao (-1.57%) and Naver (NAVER -0.97%) both declined, while Hyundai Motor (-1.26%) and Kia (-1.22%) also fell together.

Seo Sang-young, a researcher at Mirae Asset Securities, analyzed, "The rise was driven by economic normalization expectations following the U.S. employment report results. It is notable that buying was concentrated on stocks expected to have positive earnings ahead of the full earnings season."

The KOSDAQ index closed at 1,047.33, up 9.15 points (0.88%) from the previous session. The index has continued a rally for six consecutive trading days since breaking 1,000 on the 18th of last month. In particular, it has set new record highs for three consecutive trading days from the 1st of this month. On this day, individuals sold a net 279.1 billion KRW, while foreigners and institutions bought net amounts of 177.8 billion KRW and 115.8 billion KRW, respectively.

Among the top market capitalization stocks, Kakao Games jumped 6.17% following news that its new game achieved the number one sales position. Biotech stocks such as Celltrion Healthcare (1.57%), Celltrion Pharm (3.20%), and Alteogen (5.02%) also showed strength. However, Seegene fell 2.14%, and Pearl Abyss dropped 3.24%.

Lee Jin-woo, a researcher at Meritz Securities, stated, "Although there are mixed interpretations of the U.S. labor market, risk appetite continues as there are no signs of economic deterioration, as seen in the interest rate reaction. Recently, the market’s stock characteristics have diversified from a dichotomy of cyclical and growth stocks to being earnings-focused, moving gradually based on earnings rather than macro issues."

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