KOSPI Struggles at 2700 Amid Ongoing Geopolitical Uncertainty

[Image source=Yonhap News]

[Asia Economy Reporter Hwang Junho] On the 21st, the KOSPI slipped below the 2700 level from the early session due to the fallout from the conflict between Russia and Ukraine.

On this day, the KOSPI opened at 2706.65, down 37.87 points (1.38%) from the previous close. However, the decline deepened, and as of 9:30 AM, it recorded 2701.47, down 1.57%. Although individual investors tried to support the index with net purchases worth 334.4 billion KRW, the index fell below the 2700 level from the early session. This was due to increased downward pressure as foreign and institutional investors sold off. On this day, foreign and institutional investors made net sales of 90.4 billion KRW and 247.1 billion KRW, respectively.

At this time, only 146 stocks are rising. All of the top market capitalization stocks are also in decline. The perennial leader Samsung Electronics fell 2.02% to 72,800 KRW, and SK Hynix, another semiconductor stock, dropped 2.66%. LG Energy Solution, a leading secondary battery stock, fell 1.32%, LG Chem dropped 3.82%, and Samsung SDI declined 2.88%.

The sectoral declines are also notable. Except for transportation and warehousing (-0.32%), electric and gas (-0.20%), and machinery (-0.13%), all sectors showed declines.

The KOSDAQ is similarly struggling. It opened at 871.23, down 10.48 points (1.19%) from the previous close, and as of this time, the decline has widened to 1.58%. On the KOSDAQ, individual investors made net purchases of 85.9 billion KRW to defend the index, but foreign and institutional investors sold 69.9 billion KRW and 13.3 billion KRW, respectively, causing the index to fall.

Among all stocks, 202 are showing gains. Among the top market cap stocks, only Celltrion Healthcare, the KOSDAQ leader, is trading up 0.48% at 62,500 KRW.

The increased downward pressure on the stock market today is analyzed to be due to geopolitical instability. Lee Kyung-min, a researcher at Daishin Securities, said, "The escalation or easing of the Ukraine situation cannot be seen as the key variable determining the fluctuations in the current financial market," adding, "The market is currently over-immersed in the Ukraine situation." Although U.S. retail sales and industrial production in January recorded surprises, and the probability of interest rate hikes has decreased since the release of the January FOMC minutes, the Ukraine issue is diminishing the positive impact and amplifying the negative impact, according to him.

Han Ji-young, a researcher at Kiwoom Securities, forecasted, "The Korean stock market is expected to continue a phase of increased volatility due to geopolitical risks," but added, "However, the presence of relief factors such as expectations for a full reopening and inflation peaking is likely to support the lower bound of the index."

Meanwhile, the won-dollar exchange rate is showing an upward trend from the start of the day. As of this time, it is at 1,198.20 KRW, up 0.20%.

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