KOSPI Closes at 2657 Amid 'Giant Step' Concerns... Growth Stocks Hit 52-Week Lows

[Image source=Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] The KOSPI index closed down over 1% amid concerns about a 'giant step.' The KOSDAQ index also closed down over 2%, failing to hold the 900 level.

According to the Korea Exchange on the 25th, the KOSPI closed at 2,657.14, down 1.76% (47.58 points) from the previous session. The KOSPI started the day at 2,676.67, down 1.04% (28.04 points) from the previous trading day, and the decline widened throughout the session.

By investor type, foreigners and institutions sold 718.9 billion KRW and 349.5 billion KRW respectively. Individual investors alone bought 1.065 trillion KRW.

Federal Reserve Chairman Jerome Powell's heightened remarks on inflation appear to have expanded market caution. Chairman Powell stated that "the inflation peak is not yet reached" and hinted at a 50 basis point rate hike in May. Additionally, James Bullard, President of the St. Louis Fed, mentioned the possibility of a 75 basis point hike, raising concerns about a global economic slowdown and leading to a large volume of sell-offs.

Kim Seok-hwan, a researcher at Mirae Asset Securities, explained, "Last week's inflation concerns and aggressive rate hike plans announced by Fed officials caused the US stock market to decline, which then spread to Korean and Asian markets today. The widening depreciation of the Korean won also led to foreign selling, putting pressure on the index."

Among the top 10 by market capitalization, all stocks fell, including Samsung Electronics (-1.04%), LG Energy Solution (-0.80%), SK Hynix (-2.26%), Samsung Biologics (-1.00%), Samsung Electronics Preferred (-1.49%), NAVER (-3.83%), Kakao (-2.50%), and Samsung SDI (-3.02%).

In particular, growth stocks such as NAVER (-3.83%), Krafton (-3.00%), Netmarble (-3.70%), NCSoft (-2.37%), and Kakao Pay (-4.24%) hit new 52-week lows one after another.

By sector, all sectors recorded declines except for Food & Beverage (0.51%) and Paper & Wood (0.17%). Textile & Apparel (-6.77%) had the largest drop, followed by Medical Precision (-4.72%), Transportation & Warehousing (-3.12%), Machinery (-2.91%), Services (-2.49%), Steel & Metals (-2.46%), Construction (-2.40%), Telecommunications (-2.10%), Chemicals (-2.10%), and Distribution (-2.08%).

The KOSDAQ index closed at 899.84, down 2.49% (22.94 points) from the previous session. The index opened at 909.53, down 1.44% (13.25 points) from the previous trading day, but widened its losses before the close and ultimately failed to hold the 900 level.

By investor type, individuals again led net buying. Individuals net bought 303.6 billion KRW, while foreigners and institutions net sold 138 billion KRW and 122.9 billion KRW respectively.

All of the top 10 KOSDAQ stocks by market capitalization also recorded declines. These included EcoPro BM (-3.91%), Celltrion Healthcare (-3.99%), L&F (-8.42%), Pearl Abyss (-2.35%), Kakao Games (-2.41%), Celltrion Pharm (-4.92%), HLB (-0.51%), Cheonbo (-0.69%), Rino Industrial (-1.71%), and CJ ENM (-2.13%).

Meanwhile, the USD/KRW exchange rate also hit a new high, closing at 1,249.9 KRW. This is attributed to the Fed signaling a 'big step' of raising the benchmark interest rate by 0.5 percentage points at once, along with the Chinese yuan weakening, sustaining a strong dollar.

Park Sang-hyun, a researcher at Hi Investment & Securities, explained, "Not only the Fed's tightening policy but also the yuan's intraday drop of over 1% seems to have been reflected in today's USD/KRW exchange rate. The Korean won has recently shown movements linked again to the yuan."

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