Foreign Investors Increase Purchases, Kospi Firmly Rebounds... Recovers 2670 Level After 19 Trading Days

[Image source=Yonhap News]

[Asia Economy Reporter Ji Yeon-jin] The KOSPI index rebounded with a firm gain on the 31st as foreign investors switched to net buying.

The index started the day slightly down (-0.10%) but rebounded slightly in the early session, fluctuating around the slightly lower zone (around 2670) before recording a firm gain after 11 a.m. As of 11:30 a.m., the index was trading at 2674.60, up 4.24 points (0.16%) from the previous day.

Foreign investors, who were selling domestic stocks in the early session, led the rebound by net buying about 104.6 billion KRW at the same time. Institutions and individuals were net sellers of 68.1 billion KRW and 41.2 billion KRW, respectively.

The market sentiment also reversed. Although there were slightly more declining stocks in the early session, 606 stocks rose while 435 declined.

Chemical stocks such as LG Chem (3.59%), SK Innovation (2.86%), and S-Oil (2.22%) rose, showing a 2% gain in the chemical sector, while the automobile sector showed strength, with transportation equipment (1.60%) also gaining.

On this day, the KOSPI market fluctuated around the flat line amid the U.S. stock market holiday, with mixed expectations of an inflation peak and concerns that the U.S. Federal Reserve’s hawkish stance would continue.

Market participants were cautious ahead of the release of the Purchasing Managers' Index (PMI), which gauges China's economic condition, during the session. The early session foreign selling was also pressured by the rebound in the won-dollar exchange rate, which had sharply fallen the previous day.

However, China’s May manufacturing PMI rose 2.2 points from the previous month’s 47.4, indicating a slight easing of the economic contraction, which led the won-dollar exchange rate to reverse and decline.

Lee Jin-woo, a researcher at Meritz Securities, analyzed, "In the domestic stock market, some of the exchange rate and inflation risks had already been priced in, so natural selling occurred in the morning session," adding, "The easing of China’s lockdown measures contributed to won strength, calming foreign selling pressure."

Among the top market cap stocks on KOSDAQ, Samsung Electronics, LG Energy Solution, and SK Hynix fell more than 1% in the early session but narrowed their losses, while NAVER, Hyundai Motor, and Kia showed gains of around 1%.

At the same time, the KOSDAQ index was trading at 890.63, up 4.12 points (0.47%). Individuals led the rebound by buying 144.6 billion KRW worth of shares, while foreigners and institutions were net sellers of 124.4 billion KRW and 18.4 billion KRW, respectively.

Most of the top market cap stocks, including L&F and EcoPro BM, recorded gains of over 2%. Celltrion Healthcare and Celltrion Pharm also turned to gains after early session weakness.

Seo Sang-young, a researcher at Mirae Asset Securities, said, "Although China’s PMI slightly improved compared to last month’s release, it still remains below the baseline of 50, which could raise expectations for the Chinese government’s active economic stimulus policies."

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