KOSPI and KOSDAQ Start Lower Amid FOMC Caution... Foreigners and Institutions Sell Together

[Image source=Yonhap News]

[Asia Economy Reporter Lee Seon-ae] On the 15th, the domestic stock market started lower. The decline in the U.S. stock market acted as a burden. In particular, with the Federal Open Market Committee (FOMC) results approaching, caution was widespread, leading to weakened investor sentiment.

On that day, the KOSPI opened at 2,979.83, down 8.12 points (0.27%↓), and the KOSDAQ opened at 1,002.18, down 0.63 points (0.06%↓).

In the early session, only individual investors were net buyers. Foreigners and institutions were both net sellers.

As of 9:11 AM, individuals showed net buying of 78.3 billion KRW and 46.3 billion KRW in the KOSPI and KOSDAQ markets, respectively. Conversely, foreigners were net sellers by 59.3 billion KRW and 37.0 billion KRW in both markets, respectively. Institutions were net sellers by approximately 19.7 billion KRW and 2.5 billion KRW.

Most sectors in both the KOSPI and KOSDAQ are showing weakness. Among the top market capitalization stocks, there are more declining stocks than advancing ones.

Seo Sang-young, a researcher at Mirae Asset Securities, said, "The U.S. stock market declined due to concerns over aggressive moves by the Federal Reserve (Fed) following the release of high inflation data, which is expected to weigh on the Korean stock market. In particular, the weakness in large tech stocks that have driven the recent rise, as well as in electric vehicle and metaverse-related stocks continuing from the previous day, is a factor dampening investor sentiment. Additionally, if the Fed makes a more aggressive announcement than expected, foreign investors are likely to withdraw, so supply-demand factors are also negative."

Han Ji-young, a researcher at Kiwoom Securities, stated, "Although the acceleration of tapering (asset purchase reduction) has been largely priced in by the market since the November FOMC, concerns about the acceleration of interest rate hikes (early-year rate hikes) are ongoing." She added, "Of course, with the December FOMC results imminent, the domestic stock market today is expected to enter a phase of increased volatility influenced by expanded caution and the results of China's real economy indicators."

Meanwhile, on the 14th (local time), the New York stock market closed lower across the board due to declines in large tech stocks and record economic indicators fueling inflation concerns. On the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 35,544.18, down 106.77 points (0.30%) from the previous session. The Standard & Poor's (S&P) 500 index closed at 4,634.09, down 34.88 points (0.75%). The tech-heavy Nasdaq index ended trading at 15,237.64, plunging 175.64 points (1.14%).

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