KOSPI Falls Below 2700... Geopolitical Uncertainty + Economic Instability

Russia-Ukraine Conflict
US Consumer Sentiment Decline and Economic Uncertainty
KOSPI Falls Below 2700 After 8 Trading Days

On the 14th, dealers are working in the dealing room of Hana Bank in Euljiro, Seoul. On this day, the KOSPI index opened at 2715.10, down 32.61 points (1.19%) from the previous trading day. Photo by Moon Honam munonam@

[Asia Economy Reporter Hwang Junho] On the 14th, the KOSPI opened lower amid geopolitical uncertainties and growing concerns about the U.S. economy. Subsequently, as net selling by individuals and foreigners increased, the 2700 level was breached.

On that day, the KOSPI started at 2715.10, down 32.61 points (1.19%). By 9:33 a.m., it had fallen further to 2695.87, dropping below the 2700 mark for the first time in eight trading days.

Institutions supported the market by net buying 228.5 billion KRW, but individuals and foreigners net sold 164.9 billion KRW and 64.2 billion KRW respectively, widening the decline. In particular, foreigners initially engaged in net buying following the dollar's strength, with the USD/KRW exchange rate reaching 1199.10, but gradually increased their selling proportion as the session progressed.

Among all KOSPI-listed stocks, only 59 showed gains. Unless there were specific positive factors for individual stocks, most were in decline. Most of the top market capitalization stocks were also down. Only LG Chem recorded a 0.47% increase, closing at 636,000 KRW. Samsung Electronics, the perennial market leader, traded down 1.34% at 73,900 KRW. LG Energy Solution also fell 2.90%, and SK Hynix dropped 1.52%. All sectors showed declines across the board.

The KOSDAQ also opened lower and widened its losses. It started at 864.49, down 12.93 points (1.47%), but by this time had fallen 24.47 points (2.79%). On the KOSDAQ, foreigners and institutions net bought 26.9 billion KRW and 10.3 billion KRW respectively, but individuals net sold 34.6 billion KRW, pushing the index down.

Among all KOSDAQ stocks, only 71 showed gains. Among the top market cap stocks, EcoPro BM rose 0.18%, Pearl Abyss 0.21%, Wemade 0.21%, and Seegene 0.56%.

On the 14th, dealers are working in the dealing room of Hana Bank in Euljiro, Seoul. On this day, the KOSPI index opened at 2715.10, down 32.61 points (1.19%) from the previous trading day. Photo by Moon Honam munonam@

The market weakness on this day is analyzed to be due to geopolitical uncertainties and concerns over the U.S. economy. Seosangyoung, a researcher at Mirae Asset Securities, said, "Last Friday, the market declined as selling pressure emerged following reports of Russia's plan to invade Ukraine. The war with no winners and sanctions by various countries caused commodity prices to surge, increasing inflationary threats, and selling centered on technology stocks occurred."

On the 12th, there was a phone call between U.S. President Joe Biden and Russian President Vladimir Putin, but the two sides failed to narrow their differences. However, both countries are interpreted as not wanting a full-scale war, suggesting that the geopolitical tension phase is likely to be prolonged.

Concerns about the economy have also increased. The University of Michigan's U.S. Consumer Sentiment Index for February recorded 61.7, significantly below the January final figure of 67.2 and the market expectation of 67.0. This is the lowest level since October 2011.

As the Federal Reserve, which sets U.S. monetary policy, is showing a hawkish stance with a possible interest rate hike next month, weak economic indicators and expanding economic anxiety could amplify volatility in global financial markets, including South Korea.

Lee Kyungmin, a researcher at Daishin Securities, said, "We need to heighten vigilance regarding increased financial market volatility this week. Another divergence and widening gap between the economy and monetary policy are expected. Economic indicators are weaker than expected, and the January Federal Open Market Committee (FOMC) minutes are likely to be interpreted hawkishly."

On the 16th, U.S. retail sales and industrial production data will be released. The following day, the U.S. FOMC meeting minutes are scheduled to be published.

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