Tapering and China Risk... KOSPI Drops 1% and KOSDAQ Falls 2.3%

KOSPI Closes at 3060 Level, KOSDAQ at 960 Level

[Image source=Yonhap News]

[Asia Economy Reporter Minji Lee] Due to early tapering concerns originating from the U.S., regulatory risks in China, and worries about liquidity tightening, the KOSPI and KOSDAQ indices showed significant declines. Foreign investors recorded net selling for the ninth consecutive trading day.

On the 20th, the KOSPI closed at 3,060.51, down 1.20% (37.32 points) from the previous trading day. The KOSPI opened at 3,111.10, up 0.43% (13.27 points) from the previous day, and rose intraday to 3,122.09, but then turned downward and widened its losses. Looking at the supply and demand trends, individual investors alone bought stocks worth 271.4 billion KRW, while foreigners and institutions sold stocks worth 255.3 billion KRW and 14.6 billion KRW, respectively.

By sector, the declines were smallest in the following order: electric and gas utilities (-0.23%), chemicals (-0.58%), electrical and electronics (-0.78%), and pharmaceuticals (-0.84%). Among the top market capitalization stocks, Samsung Biologics (1.13%) and LG Chem (0.45%) rose, but Samsung Electronics (-0.55%), NAVER (-0.47%), Kakao (-1.71%), Samsung SDI (-0.64%), KakaoBank (-1.09%), and Hyundai Motor (-2.42%) fell.

Amid heightened concerns over U.S. tapering, risks from China negatively impacted the index decline. Contrary to market expectations for a more accommodative monetary policy, the People's Bank of China kept the Loan Prime Rate (LPR) unchanged, increasing worries about liquidity tightening. Continued corporate regulations by the Chinese government also weighed on the market. Platform companies showed sluggish performance due to additional regulatory concerns following the passage of the Personal Information Protection Act, and stocks related to pharmaceuticals also declined amid potential distribution regulations.

Lee Kyung-min, a researcher at Daishin Securities, said, “Due to the official weakening of the Chinese yuan and expanded pressure on yuan depreciation caused by regulatory risks in China, the won-dollar exchange rate surpassed 1,180 KRW today. With various variables intertwined, downward pressure on the KOSPI is increasing, and for the time being, it is necessary to check whether support at the 3,050 level, where the 200-day moving average is located, can be secured.”

The KOSDAQ index closed at 967.90, down 2.35% (23.35 points) from the previous trading day. The KOSDAQ opened at 997.02, up 0.59% (5.87 points) from the previous day, and briefly surpassed the 1,000 mark early in the session, but ultimately recorded a decline of over 2%. Regarding investment trends, individuals and institutions bought stocks worth 46.9 billion KRW and 16.8 billion KRW, respectively, while foreigners alone sold stocks worth 63.7 billion KRW.

By sector, the declines were not large in digital content (-0.03%), internet (-1.14%), information devices (-1.21%), and transportation equipment and parts (-1.61%). Among the top market capitalization stocks, EcoPro BM (0.32%), Celltrion Pharm (0.25%), Kakao Games (1.97%), Pearl Abyss (5.19%), HLB (0.73%), and SK Materials (2.77%) rose, while Celltrion Healthcare (-2.89%), L&F (-3.48%), and Seegene (-6.11%) fell.

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