KOSPI and KOSDAQ Hit by FOMC Aftershock... Morning Decline Widens Amid Foreign and Institutional 'Selling'

KOSPI Drops Further on Foreigners' Futures/Spot Selling
KOSDAQ Also Sees Foreigners and Institutions 'Selling'
Market Experts View High Possibility of Fed's 'Giant Step'
US Stocks Plunge... Korean Market Falls Over 1%

On the 6th, dealers were busy working in the Hana Bank dealing room in Euljiro, Seoul, as the KOSPI index showed a downward trend due to the impact of the U.S. stock market crash. On that day, the KOSPI started at 2,650.89, down 26.68 points (1.00%) from the previous session. The KOSDAQ began at 888.54, down 11.52 points (1.28%). The won-dollar exchange rate started at 1,267.0 won, up 0.7 won, breaking through the 1,270 won level again. Photo by Moon Honam munonam@

[Asia Economy Reporter Hwang Yoon-joo] On the morning of the 6th, both the KOSPI and KOSDAQ started lower and are gradually widening their losses. Foreign investors and institutions are showing net selling, pulling the indices down. In particular, foreign investors are selling in both the spot and futures markets, showing limitations in supply and demand.

As of 10:31 a.m., the KOSPI is at 2,642.92, down 34.65 points (-1.29%) from the previous day. It started at 2,650.89, down 1.00%, and has slightly widened its losses since. The KOSPI index even dropped to 2,639.225 shortly after the market opened.

Foreign investors and institutions are net selling 166.9 billion KRW and 216.7 billion KRW, respectively. Individual investors alone are net buying 371.2 billion KRW. Foreign investors have been selling in the futures market for three consecutive trading days since the 3rd. Currently, they are net selling 343.2 billion KRW.

By institution type, financial investment (-122.5 billion KRW) is leading the selling. Private equity funds (-51.9 billion KRW) and pension funds (-33.1 billion KRW) follow. Except for banks (+0.3 billion KRW), institutions are selling in the morning session.

[Image source=Yonhap News]

Despite the Fed blocking the possibility of a 'Giant Step (75bp hike)' the previous day, the market is pricing in a high chance of a June 'Giant Step,' which is interpreted as the reason for the sharp decline in the three major U.S. stock markets. Additionally, the Bank of England (BOE) issued warnings about inflation and economic slowdown, significantly dampening investor sentiment toward risk assets, according to securities firms.

Among the top market capitalization stocks, unlike at the opening, LG Chem (+0.77%) and Kia (+0.72%) have turned to an upward trend. The rest are all declining. Naver (-3.90%) and Kakao (-4.27%) show relatively high declines. Samsung Electronics also fell 1.77%, giving back all of yesterday’s gains.

Looking at sector performance, unlike right after the opening, only Electric and Gas Utilities (+0.44%), Transportation and Warehousing (+0.38%), and Telecommunications (+0.27%) are rising. The rest are all falling. Textile and Apparel (-2.74%), Services (-2.40%), and Steel and Metals (-2.03%) show relatively high declines.

Suh Sang-young, head of the Media Content Division at Mirae Asset Securities, said, "The BOE’s warning about economic slowdown and U.S. economic indicators have created a challenging environment around the stock market, dampening investor sentiment. However, compared to the nearly 5% drop in the U.S. Nasdaq, the domestic market’s decline is only in the 1% range."

He added, "The afternoon session will depend on the wage growth rate in the U.S. employment report released today and the remarks from Federal Reserve officials scheduled for today."

On the 6th, dealers were busy working in the Hana Bank dealing room in Euljiro, Seoul, as the KOSPI index showed a downward trend due to the impact of the U.S. stock market crash. On that day, the KOSPI started at 2,650.89, down 26.68 points (1.00%) from the previous session. The KOSDAQ began at 888.54, down 11.52 points (1.28%). The won-dollar exchange rate started at 1,267.0 won, up 0.7 won, breaking through the 1,270 won level again. Photo by Moon Honam munonam@

As of 10:41 a.m., the KOSDAQ is down 15.54 points (-1.72%) at 884.52. It started at 888.54, down 11.52 points, and continues its weakness.

Foreign investors and institutions are net selling 29.1 billion KRW and 71.9 billion KRW, respectively, pulling the index down. Individual investors alone are net buying 100.7 billion KRW.

Among the top market capitalization stocks, all are declining except HLB, which has turned flat. Pearl Abyss shows the highest decline at -5.04%. L&F, which showed a significant rise the previous day, follows with -4.33%. Celltrion Healthcare (-2.13%), Rino Industrial (-2.10%), and Kakao Games (-2.05%) also show relatively notable declines.

Currently, all sectors are declining. Digital Content (-3.78%) and Food & Tobacco (-3.16%) show particularly notable declines.

Meanwhile, in the Seoul foreign exchange market, the won-dollar exchange rate opened at 1,267.0 won, up 0.7 won, and recorded 1,275.80 in the early session. Due to tightening concerns, the exchange rate is rising sharply again.

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