KOSPI Weakens Below 3000 Due to Foreign and Institutional Selling... "Limited Impact from US Tightening Acceleration"

[Image source=Yonhap News]

[Asia Economy Reporter Ji-hwan Park] On the 10th, the KOSPI continued its downward trend around the '3000 level.' This is interpreted as being negatively affected by concerns that the U.S. Federal Reserve's (Fed) tightening pace could accelerate further. Analysts also point out that the recent seven consecutive trading days of KOSPI gains led to profit-taking selling pressure. However, market experts generally expect the impact on the domestic stock market to be limited, as the Fed's accelerated tightening is somewhat anticipated.

As of 10:22 a.m. on the day, the KOSPI stood at 3008.94, down 20.63 points (0.68%) from the previous trading day. The index opened at 3008.70, down 20.87 points (0.69%) from the previous close, and briefly fell below the 3000 mark in early trading. By investor type, foreigners and institutions sold net amounts of 119.2 billion KRW and 83.2 billion KRW, respectively, while individuals bought net 199.9 billion KRW.

On the 9th (local time), the New York stock market declined amid caution ahead of the November Consumer Price Index (CPI) release. On the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 35,754.69, down 0.06 points (0.00%) from the previous session. The Standard & Poor's (S&P) 500 fell 33.76 points (0.72%) to 4667.45, and the tech-heavy Nasdaq dropped 269.62 points (1.71%) to 15,517.37. The weekly U.S. unemployment insurance claims released that day hit the lowest level since 1969. The rapid improvement in employment indicators raised concerns that inflationary pressures might accelerate, potentially speeding up the Fed's tightening pace.

Among the top 10 stocks by market capitalization, all except Hyundai Motor (0.97%) and Kia (2.14%) were in decline. Samsung Electronics (-1.28%), SK Hynix (-2.02%), NAVER (-1.25%), Samsung Biologics (-1.09%), Kakao (-0.41%), and LG Chem (-2.14%) all declined.

At the same time, the KOSDAQ index was at 1016.75, down 6.12 points (0.60%) from the previous close. The index opened at 1016.34, down 6.53 points (0.64%), showing a weak trend.

On the KOSDAQ, foreigners and institutions sold net amounts of 180.7 billion KRW and 125.7 billion KRW, respectively, while individuals bought net 319.4 billion KRW.

Among the top 10 market cap stocks on KOSDAQ, performances were mixed. Celltrion Healthcare (-1.07%), EcoPro BM (-3.19%), Pearl Abyss (-2.67%), L&F (-2.45%), Kakao Games (-1.69%), and Wemade (-2.25%) declined. Meanwhile, Celltrion Pharm (0.40%) and Alteogen (0.34%) rose.

Domestic market experts analyze that the early tightening moves by the U.S. have been somewhat priced in, so the impact will be limited. Unlike the U.S., China, which has the greatest influence on the domestic market along with the U.S., has shown a stance to increase liquidity supply amid recent economic slowdown concerns, acting as a buffer. Woong-chan Lee, a researcher at Hi Investment & Securities, said, "The recent positive KOSPI trend is largely due to China's monetary policy moving in a more accommodative direction. Even if the U.S. accelerates tapering, the buffering effect from China means the market shock will likely be less severe than in the U.S." Regarding the China Evergrande default issue, he added, "It is already a government-controlled default in China, and with China's monetary easing policies, the market impact is expected to be limited."

Ji-young Han, a researcher at Kiwoom Securities, said, "Since the market has partially priced in the December tapering acceleration, market instability due to the tapering acceleration is expected to be limited."

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