Clear Risk Asset Avoidance... KOSPI and KOSDAQ Close Down Over 1%

Ukraine Crisis Shakes Fragile Market Sentiment
Economic Uncertainty and Monetary Policy Burdens Could Amplify Decline

As geopolitical tensions surrounding Ukraine escalate, the KOSPI index fell more than 1% in early trading on the 22nd. Dealers are working in the dealing room at the Hana Bank headquarters in Jung-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Minji Lee] The KOSPI and KOSDAQ indices closed lower, reflecting concerns over potential armed conflict between Russia and Ukraine. As risk appetite diminished, the won-dollar exchange rate in the foreign exchange market closed at 1,102.7 won per dollar, up 0.6 won from the previous day.

On the 22nd, the KOSPI ended the session at 2,706.79, down 1.35% (37.01 points) from the previous trading day. The index opened at 2,705.08, down 1.41% (38.72 points) from the previous day, and during the session, it fell to the 2,690 level, widening the decline.

On this day, the KOSPI plunged amid interpretations that Russia’s recognition of the independence of separatist republics in Ukraine laid the groundwork for war. Despite a scheduled foreign minister-level meeting between the U.S. and Russia on the 24th, analyses emerged that Putin’s order to deploy troops to eastern Ukraine constituted a de facto invasion, heightening fears that war and sanctions from the U.S., Europe, and other Western powers would become a reality.

Lee Kyung-min, a researcher at Daishin Securities, said, “While the Ukraine situation is not the core issue for the market, it is shaking investor sentiment in an already vulnerable market and acting as a factor that amplifies the impact of negative news. Going forward, the key point to watch is whether the global financial market becomes more fragile than before if economic instability and monetary policy burdens coincide during the escalation of the Ukraine crisis.”

In the KOSPI market, individuals were the net buyers. Individuals alone purchased stocks worth 670.6 billion won, while foreigners and institutions sold stocks worth 326.1 billion won and 382 billion won, respectively.

Most of the top market capitalization stocks closed lower. Samsung Electronics fell 1.08% to 73,400 won, and LG Energy Solution dropped 2.87% to 440,000 won. Other declines included SK Hynix (-1.15%), NAVER (-1.57%), LG Chem (-4.22%), Kakao (-1.50%), Hyundai Motor (-1.89%), and Samsung SDI (-2.17%).

On the other hand, shipping stocks showed strength. This was due to rising freight indices and strengthened expectations that the logistics crisis would prolong. Korea Shipping rose 3%, while Pan Ocean and HMM increased by 2.3% and 2.1%, respectively.

On the same day, the KOSDAQ index closed at 868.11, down 1.83% (16.14 points) from the previous trading day. The index opened at 869.08, down 1.72% (15.17 points) from the previous day, and closed lower. Regarding investor trends, individuals and institutions bought stocks worth 13.8 billion won and 29.5 billion won, respectively, while foreigners sold stocks worth 48.5 billion won alone.

Among the top market capitalization stocks, Celltrion Healthcare (1.42%), EcoPro BM, and L&F rose by 1.22% and 2.24%, respectively. Conversely, Pearl Abyss (-0.42%), Kakao Games (-2.09%), Wemade (-4.64%), and HLB (-2.94%) declined. Kim Seok-hwan, a researcher at Mirae Asset Securities, explained, “In the KOSDAQ market, secondary battery material stocks showed an upward trend. L&F’s stock price reflected expectations of price increases due to a shortage of high-nickel cathode material supply and an upward revision of earnings forecasts.”

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