Ants' '1 Trillion Net Buying' Lifts 2700... KOSPI's Defense Against Decline

[Image source=Yonhap News]

[Asia Economy Reporter Lee Seon-ae] Aggressive net buying by individual investors is defending the index decline. In the afternoon, the KOSPI has recovered to 2700 again, and the KOSDAQ is maintaining the 920 level. As of this time, individual net buying exceeds 1 trillion won.

As of 1:40 PM on the 22nd, the KOSPI is at 2701.40, and the KOSDAQ is at 921.17. The KOSPI started the day down 23.49 points at 2704.72 (0.86%↓), and the KOSDAQ opened down 6.91 points at 922.77 (0.74%↓). Immediately after the open, the KOSPI gave up the 2700 level again, dropping to the 2690 range, and the KOSDAQ also fell below 920, showing a weak trend. However, due to factors such as individual net buying and earnings expectations, the market is showing limited fluctuations.

At this time, individuals are aggressively net buying about 742.6 billion won in the KOSPI market alone. In the KOSDAQ market, they also have a buying advantage of about 281.2 billion won. On the other hand, foreigners and institutions are both net sellers. Institutions, which recorded net buying the previous day, switched to net selling in just one day, selling about 626 billion won and 167.8 billion won in the KOSPI and KOSDAQ markets, respectively. Foreigners are also recording net sales of about 128.6 billion won and 93.5 billion won in both markets, respectively.

Seo Sang-young, a researcher at Mirae Asset Securities, said, "The U.S. stock market started strongly higher early in the session due to the Tesla effect, but the sharp rise in Treasury yields led to selling pressure on tech stocks, expanding the decline, which is a burden on the Korean stock market." He added, "Especially, Federal Reserve Chairman Jerome Powell's assertion that globalization has clearly slowed down could dampen investment sentiment toward Korea, which is highly dependent on exports, which is also a burden."

However, he emphasized that the expansion of measures to stimulate the economy, such as the Chinese Ministry of Commerce announcing targeted policies to promote consumption, is positive. Increased Chinese consumption can lead to increased Chinese exports, which is favorable for the Korean stock market. Researcher Seo said, "Although the Korean stock market is expected to decline today, it is ahead of the U.S. large tech companies' earnings season, which is generally expected to exceed expectations, so limited fluctuations are anticipated."

Meanwhile, Chairman Powell attended a discussion on the international economy at the International Monetary Fund (IMF) General Meeting on the 21st (local time) and said regarding interest rate hikes, "In my view, it would be appropriate to move more quickly," adding, "A 50 basis point increase will be considered at the May meeting." This indicates the possibility of a 50 basis point rate hike at the Federal Open Market Committee (FOMC) regular meeting scheduled for May 3-4.

The market is increasingly expecting that the Fed will take at least three 'big steps' of 0.5 percentage point rate hikes in the remaining six FOMC regular meetings this year. Chairman Powell also hinted at the possibility of multiple 50 basis point rate hikes, not just one in May, saying at the discussion, "The market is generally responding appropriately."

Seo Jung-hoon, a researcher at Samsung Securities, explained, "The rising trend in market interest rates can stimulate debates on stock market valuations," adding, "Since high interest rates are expected for the time being, caution should be exercised when investing in small and mid-cap growth stocks."

Most of the top market capitalization stocks are declining. In the KOSPI market, SK Hynix (-2.21%), Naver (-3.23%), and Kakao (-2.35%) are showing downward trends. In the KOSDAQ market, most stocks such as EcoPro BM (-0.65%), Celltrion Healthcare (-1.15%), Wemade (-1.56%), and EcoPro (-2.61%) are also declining.

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