Concerns Over Tightening and LG Energy Solution IPO Impact... KOSPI Ends Flat Around 2920 Level

Growing Arbitrage Trading Centered on Individuals and Institutions
Increasing Cashing Demand Ahead of LG Energy Solution Subscription

Semiconductor Exports Rise Early This Month (1-10)
Samsung Electronics and SK Hynix Show Strength

[Image source=Yonhap News]

[Asia Economy Reporter Minji Lee] Concerns over the accelerated tightening policy of the U.S. Federal Reserve (Fed) combined with demand to liquidate assets ahead of LG Energy Solution's (LG EnSol) IPO have caused the KOSPI to remain sluggish. Despite starting higher due to a rebound in the Nasdaq index the previous day, the market failed to maintain this momentum and closed near the flat line.

On the 11th, the KOSPI closed at 2,927.38, up 0.02% (0.66 points) from the previous trading day. The index opened at 2,930.93, up 0.14% (4.21 points) from the previous day, and rose more than 0.5% early on but soon narrowed gains and showed a downward trend. In the market, foreigners alone bought stocks worth 487.8 billion KRW, while individuals and institutions sold stocks worth 218.2 billion KRW and 267.7 billion KRW, respectively.

It is analyzed that individuals liquidated assets ahead of the general subscription for LG EnSol's IPO. Institutional investors are estimated to be increasing the scale of arbitrage trading by selling due to the backwardation (spot prices higher than futures prices) in the KOSPI 200 futures-spot basis. Kim Young-hwan, a researcher at NH Investment & Securities, explained, "External negative factors such as concerns over the Fed's monetary tightening and the increase in idle funds ahead of a large IPO are making arbitrage trading by financial investment funds exert a stronger downward pressure on stock prices than usual."

By sector, the electrical and electronics, pharmaceuticals (1.11%), and medical precision (0.39%) sectors showed gains. The electrical and electronics sector's positive reflection on the index is attributed to semiconductor exports increasing by 23.3% year-on-year from January 1 to 10. Accordingly, Samsung Electronics and SK Hynix rose 1.15% and 2.81%, respectively.

Among the top market capitalization stocks, LG Chem (3.38%), Hyundai Motor (0.48%), Samsung SDI (0.48%), Kia (0.36%), and Celltrion (5.08%) rose, while Samsung Biologics (-0.36%) and Kakao (-1.66%) declined.

Lee Kyung-min, a researcher at Daishin Securities, said, "The KOSPI fluctuated between 2,920 and 2,930 amid net buying by foreigners, influenced by the calming of U.S. Treasury yields and the dramatic rebound of the Nasdaq. Considering that a rebound occurred around the 2,910 level during the unstable fluctuations in October and November last year, this level is expected to act as a support line."

The KOSDAQ index closed at 969.92, down 1.07% (10.46 points) from the previous trading day. The KOSDAQ opened at 982.44, up 0.21% (2.06 points) from the previous day, but selling pressure centered on foreigners and institutions led to a decline early in the session. Regarding investment trends, individuals alone bought stocks worth 228.3 billion KRW, while foreigners and institutions sold stocks worth 157.0 billion KRW and 86.5 billion KRW, respectively.

Among the top market capitalization stocks, Celltrion Healthcare (6.58%), Celltrion Pharm (1.11%), and CJ ENM (2.14%) rose, while EcoPro BM (-2.84%), L&F (-2.74%), Kakao Games (-2.02%), and Wemade (-8.84%) declined.

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