Shaking Off FOMC Uncertainty... Kospi Shows Strong Slight Gains

Omicron and Supply Chain Issues Expected to Impact Stock Market
KOSDAQ Rises on Foreign and Institutional Buying Momentum

[Image source=Yonhap News]

[Asia Economy Reporter Gong Byung-sun] The domestic stock market is rebounding as the U.S. Federal Open Market Committee (FOMC) showed a hawkish stance in line with expectations, dispelling uncertainties. "Hawkish" refers to a tendency to prefer tightening when signs of economic overheating appear. The KOSPI showed a firm upward trend, supported by foreign buying.

As of 10:33 a.m. on the 16th, the KOSPI stood at 3002.02, up 0.42% (12.63 points) from the previous day. The market opened at 3013.26 but the pace of gains has somewhat slowed.

The resolution of uncertainties related to the FOMC is interpreted as having a positive impact on the domestic stock market. On the 15th (local time), the U.S. Federal Reserve (Fed) announced through the FOMC that it would accelerate the tapering of asset purchases to $30 billion per month (approximately 35.508 trillion KRW) and plans to end it by March next year. Additionally, the dot plot forecasted three interest rate hikes next year.

Labor Gil, a researcher at Shinhan Financial Investment, explained, "The normalization of U.S. monetary policy is bad news for the domestic stock market, but paradoxically, it helped eliminate uncertainty," adding, "The recent volatility in the domestic market had already priced in related issues, which also influenced today's rebound."

The future direction of the stock market is expected to be influenced by the new COVID-19 variant "Omicron" and supply chain issues. Researcher Noh said, "The issue of interest rate hikes has peaked, but the spread of Omicron is ongoing," and added, "If supply chain problems originating from emerging markets are not resolved, it could negatively impact the stock market."

Foreigners' buying led to the index rise. Foreign investors net purchased 116.7 billion KRW. Individuals and institutions net sold 105.6 billion KRW and 26 billion KRW, respectively.

Almost all sectors rose. Pharmaceuticals had the largest gain at 2.36%, followed by telecommunications (2.04%), medical precision instruments (1.62%), textiles and apparel (1.21%), chemicals (0.93%), and manufacturing (0.67%). Food and beverages (-0.55%), steel and metals (-0.52%), machinery (-0.45%), securities (-0.44%), and construction (-0.29%) declined.

Many of the top 10 market capitalization stocks showed strength. Samsung Biologics had the largest gain at 4.98%, followed by Samsung SDI (1.93%), LG Chem (1.87%), Kakao (0.42%), Kia (0.36%), and NAVER (0.26%). KakaoBank fell by 0.32%. Samsung Electronics, SK Hynix, and Hyundai Motor remained flat.

At the same time, the KOSDAQ rose 0.94% (9.42 points) to 1012.94, having reached 1016.32 at 9:52 a.m.

Foreign and institutional buying was relatively strong. Foreigners and institutions net purchased 13.8 billion KRW and 32.6 billion KRW, respectively. Individuals net sold 36.8 billion KRW.

Most sectors rose. Digital content led with a 2.69% increase, followed by IT software & services (2.24%), software (1.96%), entertainment and culture (1.95%), and telecommunications services (1.71%). Textiles and apparel (-0.73%) and other services (-0.41%) declined.

All top 10 market capitalization stocks rose. Wemade led with a 4.69% gain, followed by Pearl Abyss (3.51%), L&F (2.74%), Kakao Games (2.25%), EcoPro BM (1.19%), Celltrion Pharm (0.88%), Celltrion Healthcare (0.36%), HL B (0.29%), and Alteogen (0.23%). SK Materials' stock trading is suspended due to its merger with SK.

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