KOSPI Weakens Amid US April CPI and New York Stock Market Plunge... Decline Narrows

[Image source=Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] Due to the U.S. Consumer Price Index (CPI) for April falling short of expectations and the sharp decline in the New York stock market, the domestic stock market showed weakness on the 12th. However, the slowdown in the April CPI increase and the inflation peak-out have helped recover some of the losses.

As of 11:20 a.m. that day, the KOSPI index recorded 2,586.06, down 6.21 points (0.24%) from the previous day. The KOSPI fell to 2,562.51 but then reduced its losses. On the options expiration day, individual and foreign investors were net buyers of approximately 112.3 billion KRW and 13.2 billion KRW respectively, while institutions were net sellers of 129.3 billion KRW.

Among the top market capitalization stocks, LG Energy Solution rose 0.77%, showing the largest gain. Samsung Biologics also rose 0.63%. On the other hand, Kakao fell more than 3%, followed by LG Chem (-2.31%), NAVER (-1.61%), Hyundai Motor (-0.82%), Samsung SDI (-0.51%), Samsung Electronics (-0.46%), SK Hynix (-0.45%), and Kia (-0.23%), showing weakness.

By sector, medical precision rose more than 4%. Insurance, which had fallen more than 2% the previous day, rose 1.80%, followed by electricity and gas (1.69%), transportation and warehousing (1.63%), distribution (1.02%), and steel and metals (0.95%). Service (-1.41%), banking (-1.38%), machinery (-1.24%), chemicals (-1.14%), and construction (-0.61%) were weak.

At the same time, the KOSDAQ index recorded 856.99, down 9.35 points (1.08%) from the previous day. Individuals were net buyers of about 200.1 billion KRW, while foreigners and institutions were net sellers of 89.6 billion KRW and 107.5 billion KRW respectively.

Among the top market capitalization stocks, HLB rose 15.48%, the only stock showing an upward trend. CJ ENM (-7.24%), Cheonbo (-4.33%), Pearl Abyss (-4.25%), Celltrion Healthcare (-3.29%), and Kakao Games (-3.28%) declined.

On this day, the domestic stock market showed a downward trend due to the impact of the U.S. April CPI announcement and the ripple effect of the New York stock market plunge. The April CPI rose 8.3% compared to the same period last year, exceeding the expected 8.1%. This raised concerns that high inflation would persist for a long time, causing the New York stock market to plummet. On the 11th (local time), the Dow Jones Industrial Average closed at 31,834.11, down 326.63 points (1.02%) from the previous session. The Standard & Poor's (S&P) 500 index fell 65.87 points (1.65%) to 3,935.18, and the tech-heavy Nasdaq index dropped 373.43 points (3.18%) to 11,364.24.

However, since the increase in the April CPI was less than the 8.5% recorded the previous month, confirming the inflation peak-out, it is analyzed to have had a positive effect on the domestic stock market. Seosangyoung, a researcher at Mirae Asset Securities, explained, "There were concerns that high inflation would reduce consumption and cause economic slowdown," adding, "However, the fact that the inflation peak-out has appeared is positively influencing the domestic stock market."

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