Foreign Investors' Net Buying Inflows on Expectations of China's Economic Recovery and Exchange Rate Stability Expand KOSPI Gains... KOSPI Gains Expand

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[Asia Economy Reporter Ji Yeon-jin] The domestic stock market expanded its gains in the afternoon on the 30th, boosted by the rebound in the U.S. stock market and expectations of a recovery in the Chinese economy. The KOSPI index easily surpassed the resistance level of 2650 as foreign investors, who had shown strong selling pressure this year, began buying domestic stocks with the won-dollar exchange rate falling to 1250 won.

As of 2:02 a.m. on the day, the KOSPI index was trading at 2670.13, up 32.08 points (1.22%) from the previous day. The index started the day up 0.88% and has been expanding its gains since.

Institutions led the rise by net buying about 404.5 billion won, while foreign investors also supported the market with net purchases worth 235.2 billion won. Individuals were net sellers, offloading about 644.9 billion won.

The KOSPI's upward trend was largely influenced by the sharp rebound in the U.S. stock market last weekend amid growing expectations of an inflation peak-out.

The U.S. Department of Commerce reported that the Personal Consumption Expenditures (PCE) price index for April rose 6.3% year-on-year and 0.2% month-on-month. This figure is lower than the 6.6% year-on-year increase in March, which was the largest in 40 years. The inflation gauge referenced by the U.S. Federal Reserve (Fed) showed a slowdown in its rise for the first time in a year and a half since November 2020.

As a result, bargain hunting centered on technology stocks, which had plunged due to concerns over stagflation (a phenomenon where inflation and economic stagnation occur simultaneously), took place in the U.S. stock market.

In the KOSPI market, technology stocks are also showing strength, with NAVER up 4% and Kakao rising 2.33%. Samsung Electronics, LG Energy Solution, and LG Chem are each gaining close to 2%, while Samsung Biologics and Hyundai Motor are up by more than 1%.

LG is surging nearly 9% amid expectations of an expanded shareholder return policy.

Lee Kyung-soo, a researcher at Daishin Securities, said, "The U.S. stock market successfully rebounded, and with the won-dollar exchange rate moving into the 1250 won range, foreign net buying flowed in. Tomorrow, the Chinese PMI (Purchasing Managers' Index) is expected to improve, and since the KOSPI has surpassed the resistance level of 2650, it is likely that the stock market's upward trend will continue for the time being."

At the same time, the KOSDAQ index rose 10.91 points (1.25%) to 884.88. While individuals were net sellers of about 50.3 billion won, foreigners and institutions were net buyers of approximately 10.4 billion won and 48.7 billion won, respectively.

Among the top market cap stocks in KOSDAQ, Wemade is recording the largest gain, nearly 9%, as the stability of its self-issued coin, WEMIX, is highlighted. EcoPro BM, the leading stock in KOSDAQ, is up 4%. Except for HLB, which is down nearly 5% ahead of the Phase 2 clinical trial results of ‘Riboceranib,’ an anticancer drug under development next month, most of the top stocks are on the rise.

Seo Sang-young, a researcher at Mirae Asset Securities, analyzed, "The strong performance of the U.S. stock market amid rising expectations of an inflation ‘peak-out’ has had a positive impact on the Korean stock market. Recently, buying sentiment has increased during declines caused by overselling, which is one of the market's hot topics. Supported by positive foreign demand due to inflation peak-out expectations and the stabilization of the won-dollar exchange rate, the Korean stock market is showing a solid trend."

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