"Only Individuals Buy"... KOSPI Drops Around 0.8% Intraday

Futures Index Declines Amid Concerns Over US Tech Stocks Earnings

[Image source=Yonhap News]

[Asia Economy Reporter Minji Lee] The KOSPI's downward trend is accelerating. On the 23rd (local time), although the three major U.S. stock indices in New York closed higher, concerns over the earnings of major U.S. tech stocks caused futures indices to plunge, which is believed to have influenced the decline.

As of 10:30 a.m. on the 24th, the KOSPI stood at 2,626.24, down 0.8% (21.14 points) from the previous trading day. The index opened at 2,638.94, down 0.32% (8.44 points) from the previous day, and has been widening its losses since.

After the U.S. market closed the previous day, expectations for a rise in the domestic stock market increased. This was due to reduced concerns about a recession amid hopes for tariff reductions on China by the Joe Biden administration. The Nasdaq rose 1.6%, while the Dow Jones Industrial Average (1.98%) and S&P 500 (1.86%) also increased. The decline in the won-dollar exchange rate also raised expectations for improved foreign investor demand.

However, contrary to these expectations, foreign investors and institutions have continued net selling in the domestic stock market. Looking at investment trends, individual investors alone bought stocks worth 205.1 billion KRW, while foreign investors and institutions sold stocks worth 117 billion KRW and 93.1 billion KRW, respectively.

The sharp drop in investor sentiment toward major tech stocks was triggered by Snap, a leading U.S. tech company, forecasting a significant downward revision in its earnings guidance. Looking at U.S. futures, Nasdaq futures plunged 1.4%, while Dow futures (-0.4%) and S&P 500 futures (-0.8%) also showed declines. On the same day, Snap stated in a report submitted to the U.S. Securities and Exchange Commission (SEC) that "the macroeconomic environment has significantly deteriorated compared to when the earnings guidance was provided on the 21st of last month, and the second-quarter earnings will fall below the previously indicated lower bound."

By sector, the largest gains were seen in electric and gas utilities (2.72%), construction (1.57%), textiles and apparel (1.47%), and transportation and warehousing (1.46%). Korea Electric Power Corporation (KEPCO) rose 4.6%, positively influenced by news that the Ministry of Trade, Industry and Energy will announce an administrative notice for 20 days until the 13th of next month to limit the electricity market price (SMP) sold to KEPCO to 1.25 times the 10-year average, as part of the 'Notice on the Ceiling of Electricity Trading Prices' revision. KEPCO has been recording large-scale losses due to soaring fuel costs. This measure means that even if fuel costs surge, the price will be capped at a maximum of 25% above the average price.

Among the top market capitalization stocks at this time, all except LG Energy Solution (0.11%) were down. Samsung Electronics (-1.33%), SK Hynix (-3.1%), NAVER (-3.6%), Hyundai Motor (-1.06%), and Kakao (-1.93%) also declined. LG Chem (-0.37%) and Kia (-0.36%), which showed gains early in the session, also fell.

At the same time, the KOSDAQ index stood at 878.52, down 0.57% (5.07 points) from the previous trading day. The index opened at 881.55, down 0.23% (2.04 points) from the previous day, and continued its downward trend. Looking at investment trends, individual investors alone bought stocks worth 116 billion KRW, while foreign investors and institutions sold stocks worth 73.4 billion KRW and 33.3 billion KRW, respectively.

Among the top market capitalization stocks, Ecopro BM (-1.71%), L&F (-1.55%), Celltrion Healthcare (-1.02%), Celltrion Pharm (-0.64%), Chunbo (-1.14%), and Rino Industries (-1.89%) declined, while Kakao Games (0.17%), Pearl Abyss (0.16%), and Wemade (1.19%) rose.

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