KOSPI Takes a Breather... Investors Hold Back Ahead of Fed Chair Powell's Remarks

Earnings Season Optimism Drives Market... Eyes on Fed Chair Powell's Congressional Appearance

On the 14th, employees are working at the Hana Bank headquarters in Jung-gu, Seoul. [Image source=Yonhap News]

[Asia Economy Reporter Minwoo Lee] The KOSPI has maintained a slightly weak trend since the early trading session. The market is showing little fluctuation as investors remain cautious ahead of Federal Reserve Chairman Jerome Powell's testimony before Congress on the 14th and 15th (local time).

As of 11:05 a.m. on the 14th, the KOSPI stood at 3,259.41, down 0.37% from the previous day. After opening slightly lower at 3,270.09, it dropped to 3,250.45, down 0.64% from the previous day in early trading, but then rebounded slightly.

Investor sentiment was dampened by the overnight decline in the U.S. stock market, but the cautious stance is interpreted as investors waiting for Chairman Powell's congressional remarks. Ji-young Han, a researcher at Kiwoom Securities, explained, "There is still optimism due to the earnings season, and the market is adopting a wait-and-see attitude to see how Powell will address inflation concerns." Chairman Powell is scheduled to appear before the House Financial Services Committee and the Senate Banking Committee on the 14th and 15th, respectively, for semiannual monetary policy hearings. Attention is focused on whether he will make any changed remarks on the U.S. economic outlook or tapering (reduction of asset purchases) compared to last month's Federal Open Market Committee (FOMC) meeting.

By investor type, foreigners and institutions sold net amounts of 123.6 billion KRW and 186.3 billion KRW, respectively, while individuals bought a net amount of 330.4 billion KRW.

Many sectors continued to decline. The largest drops were seen in transportation and warehousing (-1.31%), medical precision (-0.99%), construction (-0.98%), and securities (-0.90%). Steel and metals (0.81%) and food and beverages (0.54%) rose.

At the same time, the KOSDAQ index was down 0.05% from the previous day at 1,042.71. It started at 1,043.50, up 0.02% from the previous day, fell to 1,038.68, but then rebounded. A researcher commented, "The KOSDAQ market, which is more influenced by domestic rather than external factors, seems to have reduced the impact of the surge in COVID-19 cases on stock prices," adding, "President Moon Jae-in's announcement to expand New Deal fund investments also had a positive effect."

In his keynote speech at the 'Korean New Deal 2.0 - The Nation Creating the Future of Korea' (the 4th Korean New Deal Strategy Meeting) held at the Blue House's State Guest House on the morning of the same day, President Moon announced plans to increase the total investment scale of the Korean New Deal from the existing 160 trillion KRW to 220 trillion KRW by 2025 and to additionally raise 10 billion KRW for a citizen-participation New Deal fund.

Meanwhile, in the KOSDAQ market, individuals alone bought a net amount of 149.4 billion KRW. Foreigners and institutions sold net amounts of 80.1 billion KRW and 60.6 billion KRW, respectively.

Unlike the KOSPI, more sectors rose. The largest gains were in information devices (1.30%), IT components (0.91%), food and tobacco (0.86%), and general electrical and electronics (0.76%). Broadcasting services (-1.61%), publishing and media reproduction (-1.55%), and telecommunications and broadcasting services (-1.36%) declined.

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