Expectations for US-Russia Summit... KOSPI Closes with Reduced Losses

Expectations for De-escalation of Ukraine Crisis
KOSPI Narrows Losses, KOSDAQ Closes Higher

[Image source=Yonhap News]

[Asia Economy Reporter Hwang Junho] On the 21st, the stock market reacted sensitively to geopolitical variables and closed mixed. The KOSPI fell from the early session and did not recover until the close, while the KOSDAQ ended the day on an upward trend.

On this day, the KOSPI closed at 2,743.80, down 0.72 points (0.03%). Individual investors actively defended the index decline by net buying from the early session. However, foreign and institutional investors sold stocks worth 61.3 billion KRW and 92 billion KRW respectively, failing to prevent the index from falling. Individuals net bought stocks worth 131.4 billion KRW on the day.

KOSPI, Stock Market

[Image source=Yonhap News]

However, the decline was not across all stocks. About 399 stocks out of the total rose. Among the top market capitalization stocks, Samsung Biologics (1.32%), Kakao (1.97%), Hyundai Motor (0.82%), and Kia (0.25%) increased.

Samsung Biologics closed higher after recording record-breaking earnings. The company announced that it posted sales of 1.568 trillion KRW and operating profit of 537.3 billion KRW last year. The operating profit grew more than eightfold in four years since the first profit in 2017.

Hyundai Motor and Kia initially plunged due to the conflict between Russia and Western countries over Ukraine but turned to an upward trend during the session.

Celltrion, ranked 14th in market capitalization, closed at 161,500 KRW, up 2.54% from the previous session, following a disclosure of an 80 billion KRW share buyback.

By sector, the machinery sector stood out with a 1.69% rise. While the automobile sector rose as the possibility of war decreased, LIG Nex1, a representative defense stock, surged 7.20% amid heightened tensions, leading the machinery sector's gains.

KOSDAQ Turns to Gain

Due to the sharp rise in international oil prices, gasoline prices at gas stations nationwide continued to increase for the fifth consecutive week. According to Opinet, the oil price information site of the Korea National Oil Corporation, on the 20th, the retail price of gasoline at gas stations nationwide in the third week of this month rose by 26.6 won from the previous week to 1,718.4 won per liter. The rise in international oil prices is attributed to strong U.S. oil demand and escalating tensions between Russia and Ukraine. Oil price information is displayed at a gas station in Seoul. Photo by Moon Honam munonam@

The KOSDAQ started the day lower but closed higher, ending at 884.25, up 0.29% from the previous session. The market rose as individual investors net bought 22.4 billion KRW from the morning, followed by institutional investors' net buying of 21.3 billion KRW. Foreign investors net sold stocks worth 39.4 billion KRW.

Among the total stocks, 654 rose, and some of the top market capitalization stocks also showed gains. These included Celltrion Healthcare (2.09%), L&F (0.86%), Pearl Abyss (1.06%), Kakao Games (1.27%), and Celltrion Pharm (1.98%).

In the case of Celltrion Healthcare, at the '2022 European Crohn's and Colitis Organisation (ECCO)' held as a non-face-to-face event in Vienna, Austria, it was announced that the subcutaneous injection-type biopharmaceutical 'Remsima SC' (generic name: infliximab, subcutaneous injection type) for autoimmune disease treatment maintained stable drug concentration in Crohn's disease patients who reached remission of inflammatory bowel disease, which raised expectations reflected in the stock price.

By sector, the entertainment sector rose 4.04%, while distribution (1.83%), non-metal (1.39%), telecommunications equipment (0.80%), and telecommunications services (0.78%) also showed upward trends.

The biggest influence on the market changes that day can be summarized as changes in the international situation regarding the Russia-Ukraine conflict.

Lee Kyung-min, a researcher at Daishin Securities, analyzed, "Following French President Macron's proposal, the U.S. White House announced that it has in principle agreed to hold a summit with Russia on the condition that Russia does not invade Ukraine, which positively reflected expectations of easing geopolitical risks surrounding the Ukraine situation in the stock market."

The won-dollar exchange rate closed at 1,192.10 KRW, down 0.32% from the previous session. Kim Seok-hwan, a researcher at Mirae Asset Securities, stated, "The exchange rate surged close to 1,200 KRW in the early session but fell due to expectations of a U.S.-Russia summit."

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