Aftermath of Luhansk Attack... Mixed Reactions in Stock Market and Exchange Rates (Comprehensive)

[Image source=Yonhap News]

[Asia Economy Reporter Junho Hwang] On the afternoon of the 17th, the stock market, which had been rising on news that the Ukrainian military attacked the pro-Russian rebel-controlled region of the Luhansk Republic, turned to a decline before regaining its upward momentum.

As of 2:18 PM that day, the KOSPI was up 22.20 points (0.81%) from the previous close, standing at 2751.88. Foreign investors and institutions showed net buying intentions worth 496.9 billion KRW and 424.2 billion KRW respectively, driving the market upward.

The KOSPI initially turned to a decline (down 1.08%) around 1 PM after reports citing the Joint Control and Coordination Commission (JCCC) stated that the Ukrainian military launched mortar and grenade attacks on four locations in the Luhansk Republic controlled by pro-Russian rebels, but then sharply reversed course.

Market participants currently appear to be verifying the authenticity of the reports. Given that the attacked areas have previously experienced localized conflicts, they are considering the veracity of the information and possible response measures.

Sangyoung Seo, a researcher at Mirae Asset Securities, said, "Even when the Ukraine issue recently escalated, the Ukrainian government forces occasionally attacked the Donetsk and Luhansk regions. Given this, the likelihood of renewed friction between Russia, which is discussing diplomatic solutions, and Western countries is low."

The KOSDAQ also turned to a decline after the attack report but has since returned to an upward trend. At this time, the KOSDAQ is up 1.22 points (0.14%) from the previous close, at 879.37. Individual investors are net selling 16.9 billion KRW and foreign investors 30.8 billion KRW, while institutions are showing net buying intentions worth 51.5 billion KRW.

The won-dollar exchange rate rose by up to 0.29% around 1 PM, surpassing 1200 KRW during the session. However, it is currently trading down 0.04% at 1197.10 KRW.

Kyoungmin Lee, a researcher at Daishin Securities, explained, "The won/dollar exchange rate fell to 1194 KRW in the morning due to improved risk appetite and net buying by foreign investors in the domestic stock market, but rose to 1201 KRW during the session due to a sharp dollar surge triggered by the Ukraine issue. It has since narrowed the gains and is currently fluctuating around 1198 KRW."

Jiyoung Han, a researcher at Kiwoom Securities, analyzed, "Considering that Russia was not the first to attack, it seems appropriate to monitor additional information and respond to the market accordingly rather than preemptively panic selling."

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