Korean Stock Market Takes a Breather... KOSPI and KOSDAQ Turn Slightly Lower

Profit-taking selling emerges... Expectations for China's interest rate cut also decline

On the morning of the 20th, with the KOSPI starting on an upward trend, 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] The KOSPI and KOSDAQ, which started with slight gains, reversed into slight declines. Both markets, which had been on an upward trend, appear to be taking a brief pause.

As of 10:54 a.m. on the 20th, the KOSPI recorded 3,019.21, down 0.32% from the previous day. After opening slightly higher at 3,043.13, it shifted into a downward trend. At the same time, the KOSDAQ stood at 1,003.12, down 0.22% from the previous day. It also opened slightly higher at 1,009.11 but showed signs of hesitation.

This seems to be due to profit-taking following the recent sharp rise. The fading expectations of a rate cut by China also appear to have had an impact. On this day, the People's Bank of China, the central bank, announced the October Loan Prime Rate (LPR), which effectively serves as the benchmark interest rate, maintaining the 1-year and 5-year rates at 3.85% and 4.85%, respectively, the same levels as the previous month. The 1-year rate has been held steady for 18 consecutive months.

Park Gwangnam, head of the Digital Research Team at Mirae Asset Securities, explained, "As expectations for a rate cut in the Chinese market have disappeared, profit-taking has emerged following the recent sharp rebound. Since the won-dollar exchange rate is also holding steady in the 1,170 won range, it seems more like a consolidation phase rather than a trend reversal."

Meanwhile, both foreign and institutional investors were net sellers in both markets. In the KOSPI market, foreigners and institutions sold net amounts of 19.5 billion won and 148.2 billion won, respectively. Individual investors were net buyers of 171.8 billion won. In the KOSDAQ market, foreigners and institutions sold net amounts of 90.8 billion won and 20.3 billion won, respectively. Individual investors were net buyers of 140.6 billion won.

In the KOSPI market, more sectors declined. The largest drops were in non-metal (-2.44%), steel & metal (-2.34%), machinery (-1.76%), and transportation & warehousing (-1.47%). Banks (1.46%) and service industries (0.32%) rose.

In the KOSDAQ market, the biggest declines were in transportation equipment & parts (-1.53%), paper & wood (-1.52%), general electrical & electronics (-0.99%), and chemicals (-0.90%). Entertainment & culture (4.65%), broadcasting services (2.42%), and telecommunications & broadcasting services (1.89%) rose.

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