Impact of Strong Dollar and US Interest Rate Hike... KOSPI Closes Down at '2950 Level'

[Image source=Yonhap News]

[Asia Economy Reporter Ji-hwan Park] The KOSPI and KOSDAQ closed lower together due to the rise in the won-dollar exchange rate and the increase in U.S. Treasury yields.

On the 5th, the KOSPI closed at 2,953.97, down 35.27 points (1.18%) from the previous day. The index opened at 2,984.05, down 5.19 points (0.17%) from the previous session, and widened its losses throughout the day.

By investor type, individuals net bought 1.3051 trillion won, and foreigners net bought 32.2 billion won. On the other hand, institutions net sold 1.3405 trillion won, pulling the index down.

Most of the top 10 market capitalization stocks declined. Samsung Electronics closed at 77,300 won, down 1.65%. SK Hynix (-2.33%), Naver (-2.87%), Samsung Biologics (-3.04%), and Kakao (-5.38%) also fell. Meanwhile, LG Chem (3.11%), Hyundai Motor (1.67%), and Kia (2.87%) closed higher.

The KOSDAQ closed at 1,009.62, down 22.04 points (2.14%) from the previous day.

By investor type, individuals net bought 490.8 billion won. Conversely, foreigners and institutions net sold 234.2 billion won and 244.4 billion won, respectively.

Among the top 10 KOSDAQ stocks by market capitalization, Celltrion Healthcare (-3.41%), EcoPro BM (-2.00%), Wemade (-7.45%), L&F (-4.43%), and Kakao Games (-4.32%) declined. CJ ENM was the only stock to rise, up 0.57%.

In the securities industry, the domestic market weakness on this day was analyzed as the result of the simultaneous impact of the sharp rise in U.S. Treasury yields and the increase in the domestic exchange rate. As U.S. market interest rates surged significantly since the beginning of the year, stock price adjustments centered on growth stocks sensitive to interest rates have appeared not only in the New York stock market but also domestically. As of the 4th local time, the U.S. 10-year Treasury yield rose sharply to 1.66%, the highest level since the end of November last year at 1.67%. The dollar strength due to the accelerated pace of U.S. tightening also plays a role. Recently, the won-dollar exchange rate has approached 1,200 won, and the dollar strength negatively affects foreign investor demand.

However, the securities industry advises that there is no need for excessive anxiety. Kim Seok-hwan, a researcher at Mirae Asset Securities, stated, "The earnings estimates for domestic listed companies this year still show a solid outlook, indicating positive fundamentals," adding, "In particular, the rebound in earnings estimates for the semiconductor sector since November appears to be a factor that secures the downside rigidity of the stock market."

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