KOSPI Slightly Lower Amid FOMC Caution... KOSDAQ Closes Higher on Institutional Demand

KOSPI Mixed in the Afternoon... Foreigners Net Buy Over 100 Billion Won
KOSDAQ

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 among big tech companies, which appears to have caused a chain reaction. Photo by Moon Honam munonam@

[Asia Economy Reporter Hwang Yoon-joo] On the 3rd, the KOSPI and KOSDAQ both started higher, but institutional investor flows led to mixed outcomes. The KOSPI closed lower amid cautious and mixed sentiment ahead of the U.S. Federal Reserve's Federal Open Market Committee (FOMC) interest rate hike. In contrast, the KOSDAQ maintained its upward momentum, closing higher due to strong buying by institutions.

On the day, the KOSPI ended the session down 2.51 points at 2684.94 (0.09%↓). It opened up 2.71 points at 2690.16 but fluctuated throughout the afternoon before closing lower. The KOSDAQ closed up 5.75 points at 907.57 (0.64%↑). It started the day at 905.05, up 3.23 points, and maintained a solid upward trend throughout the morning and afternoon sessions.

The cautious sentiment reflected in the market is interpreted as a response ahead of the confirmed FOMC rate hike. Kim Seok-hwan, Senior Research Fellow at Mirae Asset Securities, said, "Most market participants expect a 50bp hike followed by a 75bp hike in June, making the Fed's very hawkish stance in the first half of the year a given," adding, "The short-term market direction depends on the remarks of Fed Chair Powell."

Looking at trading trends, institutions determined the market direction. On the KOSPI, individuals and foreigners net bought 105.4 billion KRW and 115 billion KRW respectively. However, institutions net sold 215 billion KRW, closing the session with a net outflow. Specifically, financial investment firms (such as securities companies) sold 175.5 billion KRW, pension funds 45.9 billion KRW, and insurance companies 16.3 billion KRW, showing relatively large selling pressure. These institutions have been net sellers in the KOSPI market for two consecutive days.

Although the KOSPI declined due to institutional selling, the significant foreign buying is noteworthy. Foreigners net bought over 100 billion KRW in the KOSPI for the first time in 28 trading days since March 24 (1.219 trillion KRW). During this period, foreigners net bought on only six trading days. The largest net buying amount since March was 94.3 billion KRW.

On the KOSDAQ, institutions alone net bought 128.9 billion KRW. Specifically, financial investment firms (such as securities companies) purchased 67.3 billion KRW, private equity funds 23.8 billion KRW, and investment trusts 17.3 billion KRW, ranking as the top buyers. Meanwhile, individuals and foreigners net sold 118.9 billion KRW and 4 billion KRW respectively. Foreign selling pressure eased in the afternoon.

Among the top 10 KOSPI stocks by market capitalization, Samsung SDI recorded the highest gain with a 2.13% increase. It was followed by Kakao +1.37%, Naver +0.36%, and Samsung Electronics +0.30%. The rest all declined.

Among the top 10 KOSDAQ stocks by market capitalization, battery-related stocks showed strong performance. EcoPro BM and L&F, which announced strong first-quarter earnings, rose 4.29% and 3.35% respectively. Rino Industrial also climbed in the late session, closing up 2.52%. Cheonbo +1.28% and Kakao Games +0.17% followed.

By sector, the KOSPI saw the food and beverage sector fall the most, down 1.97%. Transportation equipment -1.17%, chemicals -1.10%, steel and metals -1.10%, construction -1.10%, electricity and gas -1.09%, and securities -1.02% also showed notable declines. Conversely, only machinery +1.42%, telecommunications +0.43%, medical precision +0.33%, services +0.29%, electrical and electronics +0.23%, and small-cap stocks +0.18% closed higher.

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