KOSPI Recovers Above 3000 as FOMC Uncertainty Eases... Supply Chain Issues Still Remain

FOMC Officially Confirms Early End to Tapering... Three Rate Hikes Expected Next Year
KOSDAQ Rises 1% Early Session but Gains Narrow

[Image source=Yonhap News]

[Asia Economy Reporter Gong Byung-sun] The KOSPI index recovered above the 3000 mark as uncertainties related to the U.S. Federal Open Market Committee (FOMC) were resolved. However, concerns remain that a gap between expectations and reality may arise due to ongoing global supply chain disruptions.

On the 16th, the KOSPI closed at 3006.41, up 0.57% (17.02 points) from the previous day. Although it briefly fell below 3000 during the trading session, it surpassed the 3000 mark again around 2:50 PM.

The resolution of FOMC-related uncertainties is interpreted as having a positive impact on the domestic stock market. At the FOMC meeting held on the 14th and 15th (local time), the U.S. Federal Reserve (Fed) announced it would accelerate the pace of asset purchase tapering and complete it by March next year. Additionally, the Fed projected three interest rate hikes next year through its dot plot. Lee Kyung-min, a researcher at Daishin Securities, predicted, "As the U.S. and global stock markets are relieved, the KOSPI will likely fluctuate within a box range of 2950 to 3050," adding, "Short-term oversold stocks and neglected stocks will continue to experience rotational selling."

However, a gap between expectations and reality is expected to emerge from the resolution of uncertainties. This is because global supply chain bottlenecks have yet to be resolved. Lee said, "As global supply chain bottlenecks persist, the fundamental momentum both domestically and internationally is weakening," and added, "Entering the period just before earnings announcements at the end of this year and early next year, downward revisions of earnings forecasts are also expected to unfold."

Foreign investors maintained a strong buying trend. Foreigners net purchased 186.8 billion KRW. Individuals and institutions net sold 167.8 billion KRW and 52.2 billion KRW, respectively.

Almost all sectors rose. The telecommunications sector saw the largest increase at 2.95%, followed by pharmaceuticals (2.27%), medical precision instruments (1.81%), transportation and warehousing (1.78%), textiles and apparel (1.01%), and chemicals (0.77%). Meanwhile, machinery (-0.32%), securities (-0.22%), and food and beverage (-0.20%) sectors declined.

Among the top 10 market capitalization stocks, all except NAVER rose. Samsung Biologics recorded the largest gain at 5.97%, followed by Kia (1.66%), Samsung SDI (1.34%), LG Chem (1.29%), Kakao (0.84%), Kakao Bank (0.80%), SK Hynix (0.40%), Samsung Electronics (0.26%), and Hyundai Motor (0.24%). NAVER remained flat.

On the same day, the KOSDAQ closed at 1007.86, up 0.43% (4.34 points) from the previous day. It rose to 1016.32 at 9:52 AM but then the gains narrowed.

Foreign and institutional investors showed relatively strong buying. Foreigners and institutions net purchased 10.2 billion KRW and 57.1 billion KRW, respectively. Individuals net sold 51.7 billion KRW.

Most sectors rose. The medical and precision instruments sector led with a 2.12% increase, followed by paper and wood (1.64%), other manufacturing (1.63%), transportation (1.39%), and digital content (1.32%). Sectors that declined included textiles and apparel (-1.81%), other services (-0.83%), non-metallic minerals (-0.58%), finance (-0.40%), and internet (-0.36%).

Many of the top 10 market capitalization stocks showed weakness. HL Biotech had the largest decline at 1.00%, followed by Celltrion Healthcare (-0.49%), Alteogen (-0.47%), Kakao Games (-0.34%), and EcoPro BM (-0.08%). Meanwhile, Wemade (3.61%), Pearl Abyss (3.59%), L&F (1.22%), and Celltrion Pharm (0.32%) rose. SK Materials' stock trading was suspended due to its merger with SK.

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