Domestic Stock Market Hit by Interest Rate Hike Concerns... KOSPI Falls to 2919 Level

KOSDAQ Declines by Over 1%... All Top 10 Market Cap Stocks Fall

[Image source=Yonhap News]

[Asia Economy Reporter Gong Byung-sun] Concerns over interest rate hikes that began in the United States are shaking the domestic stock market. After the Bank of Korea's Monetary Policy Committee decided to raise interest rates, the decline in the KOSPI and KOSDAQ has been expanding.

As of 11:16 a.m. on the 14th, the KOSPI recorded 2,919.22, down 1.48% (42.93 points) from the previous day. The index started down 0.83% and the decline has been widening since then.

This is interpreted as the negative impact of concerns over U.S. interest rate hikes. According to Bloomberg, a U.S. economic media outlet, on the 13th (local time), there is an opinion within the U.S. Federal Reserve (Fed) that interest rates should be raised four times this year. Patrick Harker, President of the Philadelphia Federal Reserve Bank, supported up to four rate hikes within the year, stating, "With inflation higher than expected, logically, monetary policy tightening is inevitable."

Domestic interest rates were also raised. On this day, the Bank of Korea's Monetary Policy Committee held a meeting on monetary policy direction and raised the base interest rate by 0.25 percentage points from the previous 1.00% per annum to 1.25%. The base rate had been lowered to 0.25% in 2020 due to the economic downturn caused by COVID-19, but it has been raised three times since last year, recovering to pre-COVID-19 levels.

Lee Jae-sun, a researcher at Hana Financial Investment, explained, "The domestic interest rate hike was not far from expectations," but added, "The domestic stock market will be greatly shaken depending on the direction of U.S. monetary policy."

Foreigners and institutions are selling heavily. Foreigners and institutions net sold 163.4 billion KRW and 253 billion KRW, respectively. Individuals net bought 403.5 billion KRW.

Most sectors declined. The medical precision sector had the largest drop at 2.46%. This was followed by pharmaceuticals (-2.29%), electric and gas utilities (-1.83%), insurance (-1.78%), and services (-1.57%). The food and beverage sector rose by 0.09%.

All of the top 10 stocks by market capitalization fell. Kakao had the largest decline at 3.21%, followed by NAVER (-2.73%), LG Chem (-2.65%), SK Hynix (-2.32%), POSCO (-2.12%), Samsung SDI (-1.80%), Samsung Biologics (-1.73%), Kia (-1.30%), Samsung Electronics (-0.64%), and Hyundai Motor (-0.48%).

At the same time, the KOSDAQ recorded 970.25, down 1.32% (13.00 points) from the previous day. It even dropped to 967.19 at 9:03 a.m.

Foreigners and institutions' selling pressure led to the index decline. Foreigners and institutions net sold 84.9 billion KRW and 79.2 billion KRW, respectively. Individuals net bought 166.2 billion KRW.

Almost all sectors declined. The retail sector had the largest drop at 3.86%, followed by digital content (-2.25%), computer services (-1.87%), pharmaceuticals (-1.75%), and IT software & services (-1.66%). The internet (0.48%), semiconductors (0.45%), and food & tobacco (0.15%) sectors rose.

All of the top 10 stocks by market capitalization fell. Celltrion Healthcare had the largest decline at 7.93%, followed by Celltrion Pharm (-7.07%), Wemade (-6.01%), HL Biotech (-2.95%), Chunbo (-2.05%), CJ ENM (-2.02%), L&F (-2.01%), Kakao Games (-1.41%), EcoPro BM (-1.40%), and Pearl Abyss (-1.23%).

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