US 'Stock Market Shock' Leads to KOSPI and KOSDAQ Closing Down Together

US Stock Market Plunge Impact... Strengthened Safe-Haven Asset Preference
Semiconductor Investment Sentiment Weakens, Samsung Electronics and SK Hynix Fall Around 3%
Stagflation Concerns Amid China Production Disruptions

[Image source=Yonhap News]

[Asia Economy Reporter Minji Lee] Following a significant decline in the US stock market due to prolonged inflation-driven interest rate hikes, default concerns, and supply chain disruptions in China, the domestic stock market also showed a synchronized downward trend, falling by over 1%.

On the 29th, the KOSPI closed at 3060.27, down 1.22% (35.65 points) from the previous trading day. The KOSPI opened at 3055.50, down 1.37% (42.42 points) from the previous day, and continued its decline during the session, dropping to the 3030 level. In terms of investor trends, individual investors bought stocks worth 961.3 billion KRW alone, while foreigners and institutions sold stocks worth 657.9 billion KRW and 313.5 billion KRW, respectively.

By sector, despite the overall index decline, non-metallic minerals (2.98%), telecommunications (0.79%), transportation equipment (0.60%), and electric and gas utilities (0.54%) continued to rise. Among the non-metallic minerals sector, POSCO Chemical (7.2%) maintained its upward trend, positively influenced by expectations of improved earnings related to secondary battery materials.

Among the top market capitalization stocks, Samsung Electronics and SK Hynix fell by 2.88% and 3.38%, respectively, compared to the previous trading day. This reflects the lowered investment sentiment toward semiconductor companies in the US stock market the day before, which was mirrored in the domestic market. NAVER (-1.40%), LG Chem (-1.16%), Kakao (-0.85%), Samsung SDI (-0.84%), and Celltrion (-0.95%) also declined. Samsung Biologics was the only stock to rise, increasing by 0.34%.

Seosangyoung, a researcher at Mirae Asset Securities, explained, “The domestic stock market has continued to decline for two consecutive days due to concerns over rising US Treasury yields, and there is an expanding preference for safe assets. Most sectors showed a downward trend, and following the downward revision of Micron’s earnings guidance the previous day, foreign selling pressure increased on the electrical and electronics sectors, including Samsung Electronics and SK Hynix.”

The KOSDAQ index closed at 1001.46, down 1.09% (11.05 points) from the previous day. The index opened at 994.61, down 1.77% (17.90 points), and continued to decline, falling below the 990 level early in the session. Regarding investor trends, individuals and foreigners bought stocks worth 72.9 billion KRW and 77.8 billion KRW, respectively, while institutions sold stocks worth 128.2 billion KRW alone.

Among the top market capitalization stocks, Celltrion Healthcare (-1.08%), EcoPro BM (-4.59%), L&F (-2.61%), Celltrion Pharm (-1.34%), Pearl Abyss (-3.93%), Kakao Games (-1.33%), SK Materials (-0.27%), CJ ENM (-0.99%), and Seegene (-1.92%) declined, while HLB was the only stock to rise, increasing by 1.91%.

The securities industry expects global market volatility to expand for the time being. Amid ongoing concerns about economic slowdown due to COVID-19, rising commodity prices and supply chain disruptions in China are prolonging inflation, increasing the risk of stagflation (simultaneous occurrence of economic recession and rising prices). Shindongjun, head of the KB Securities Research Center, stated, “Due to production disruptions in China, the growth rate slowdown in China in the fourth quarter, as well as inflationary pressures in major countries, are inevitable. The bottlenecks and price stabilization that were expected to ease toward the end of the year are delayed again, so global stagflation concerns will persist for the time being.”

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