KOSPI and KOSDAQ Close Lower... Index Pressured by Foreign and Institutional 'Selling'

Major indices close lower with reduced afternoon losses
Foreign and institutional selling drags indices down
Foreigners increase afternoon KOSPI 'sell'... KOSDAQ selling scale decreases
Exchange rate rises 9.2 won at close... Won weakness burdens indices

[Image source=Yonhap News]

[Asia Economy Reporter Hwang Yoon-joo] On the 2nd, the stock market closed lower. The sharp decline in the U.S. stock market on the previous trading day, cautious sentiment ahead of the Federal Open Market Committee (FOMC) meeting, and the weakness of the Korean won led to selling pressure from foreigners and institutions, pulling down both major indices.

On that day, the KOSPI closed at 2,687.45, down 7.60 points (0.28%) from the previous session. The KOSPI started down 25.84 points but narrowed its losses by the close. Shortly after the opening, individuals and foreigners were buyers, but foreigners turned to selling during the morning session. Ultimately, foreigners and institutions sold a net 68.8 billion KRW and 180.8 billion KRW, respectively. Individuals alone bought a net 224.6 billion KRW but could not prevent the index from falling.

[Image source=Yonhap News]

Among all stocks, 424 rose while 413 fell. Large-cap stocks performed relatively well. Hyundai Motor rose 0.54%, LG Chem 1.35%, and Kia 0.72%, while Samsung Biologics and Samsung SDI closed flat near the end of trading. The rest all declined.

By sector, the electric and gas utilities (-1.71%) and insurance (-1.17%) sectors showed relatively steep declines. The electric and gas utilities sector index fell as Korea Electric Power Corporation dropped 2.81%, Kyungdong City Gas 1.90%, and SGC Energy 1.38%. The insurance sector mostly declined with Hyundai Marine & Fire Insurance down 4.15%, DB Insurance 1.93%, Samsung Fire & Marine Insurance 1.90%, Hanwha Life Insurance 1.70%, and Hanwha General Insurance 1.26%.

On the 27th, when the KOSPI and KOSDAQ indices plunged by over 2%, dealers were working in the dealing room of Hana Bank in Euljiro, Seoul. The U.S. stock market sharply declined due to concerns over a slowdown in the economic recession and earnings uncertainty of big tech companies, which appears to have caused a chain reaction. Photo by Moon Honam munonam@

The KOSDAQ closed at 901.82, down 2.93 points (0.32%). The KOSDAQ also started lower but narrowed its losses. Individuals bought a net 142.1 billion KRW, but foreigners and institutions sold net 3.3 billion KRW and 127.6 billion KRW, respectively. Foreigners’ selling volume significantly decreased in the late session.

Among all stocks, 642 rose while 720 fell. Among the large-cap stocks, only battery-related stocks closed higher. EcoPro BM, which is scheduled to announce earnings tomorrow, rose 2.85%, and L&F increased 0.78%. The rest all declined.

By sector, the entertainment culture sector (-1.22%) and distribution sector (-1.09%) showed the highest declines. The entertainment culture sector was affected by Giant Step (-4.67%) and Wysiwyg Studios (-4.05%). In the distribution sector, PN Poongnyeon had the largest decline at 5.45%.

On that day, the USD/KRW exchange rate closed at 1,265.1 won, up 9.2 won from the previous trading day. The sharp rise in the exchange rate is interpreted as reflecting strong expectations of tightening ahead of this week’s Federal Open Market Committee (FOMC) meeting.

Kim Seok-hwan, Senior Researcher at Mirae Asset Securities, explained, "Both the KOSPI and KOSDAQ fell in sync with the sharp decline in the U.S. stock market last Friday," adding, "The dollar’s strength also pressured the indices as foreigners released spot and futures sales."

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