KOSPI and KOSDAQ Decline Narrows... Focus on Won-Dollar Exchange Rate Trends

[Image source=Yonhap News]

[Asia Economy Reporter Hwang Yoon-joo] On the 2nd, both the KOSPI and KOSDAQ, which started with a downward trend, slightly reduced their losses. However, foreign investors and institutions, who began as 'buyers' in the KOSPI market right after the opening, both turned to 'sellers' in the morning. This is interpreted as being influenced by the sharp rise in the won-dollar exchange rate at the start of the day.

As of 10:56 AM, the KOSPI is at 2,676.79, down 0.68% (18.26 points) compared to the previous trading day. Foreigners and institutions are net selling 32.4 billion KRW and 128.6 billion KRW, respectively. The selling pressure from foreigners has somewhat weakened, but it has strengthened among institutions. Individual investors alone are net buying 160.6 billion KRW.

Among the top market capitalization stocks, only automobiles and chemicals are rising, similar to the opening market trend. Hyundai Motor is trading up 0.81% at 187,500 KRW, and Kia is up 0.60% at 84,300 KRW.

The KOSDAQ is down 1.09% (9.87 points) at 894.88. Individual investors alone are net buying 145.2 billion KRW, but this is insufficient to drive the index. Foreigners and institutions are net selling 44.1 billion KRW and 95.6 billion KRW, respectively.

Looking at the top market capitalization stocks, the overall decline is larger than that of the KOSPI. Only EcoPro BM shows an upward trend, rising 1.28% to 482,500 KRW.

On this day, the won-dollar exchange rate in the Seoul foreign exchange market opened at 1,264.0 KRW, soaring 8.1 KRW compared to the previous session. After a slight drop immediately after the opening, the exchange rate rose again to 1,265.4 KRW. Continued weakness of the won is unfavorable for the domestic stock market. When foreign investors convert their holdings of domestic stocks into dollars, exchange losses occur, increasing the likelihood of foreign investors withdrawing.

Lee Da-eun, a researcher at Daishin Securities, said, "For foreign capital to flow in, exchange rate uncertainty must be resolved," adding, "The market is focusing on tightening both exchange rates and interest rates, so if the May Federal Open Market Committee (FOMC) clearly mentions a future tightening stance this week, the upward momentum will be reduced."

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