'KOSPI Falls Below 2600' Close... Samsung Electronics Plummets 2.16%

by Hwang Junho

Published 10 Jun.2022 15:53(KST)

On the 8th, the KOSPI index opened at 2,633.53, up 7.19 points (0.27%), as dealers were busy working in the Hana Bank dealing room in Euljiro, Seoul. The won-dollar exchange rate started at 1,255.0 won, down 2.7 won. Photo by Moon Honam munonam@

[Asia Economy Reporter Hwang Junho] On the 10th, the stock market closed lower as downward pressure increased due to the hawkish tone of the European Central Bank amid rising inflation and news of city lockdowns in China due to COVID-19.

On that day, the KOSPI fell below the 2600 mark from the early session and continued its decline, closing at 2595.87, down 1.13% from the previous session. Individual investors net bought over 1 trillion won (1.1005 trillion won), but foreign investors (842.8 billion won) and institutions (842.8 billion won) engaged in concentrated net selling, which the market could not overcome. Foreign investors also net sold futures worth 325.8 billion won.

Kim Seokhwan, a researcher at Mirae Asset Securities, said, "Following the ECB's rate hike announcement the previous day, the US stock market mainly declined in tech stocks, and the expansion of safe-haven demand strengthened the dollar, leading to increased foreign selling." He added, "During the session, China's May inflation indicators were announced in line with expectations, and the Chinese stock market's upward trend helped reduce the decline."

Among all stocks, 616 stocks fell. Most of the top market capitalization stocks also showed a downward trend. Samsung Electronics, the immutable leader, dropped 2.15% in a single day to 63,800 won. SK Hynix (-1.90%), NAVER (-1.02%), and LG Chem (-1.02%) also closed lower. On the other hand, LG Energy Solution (0.59%), Hyundai Motor (1.10%), and Samsung SDI (0.72%) showed slight gains.

By sector, construction (0.99%), textiles and apparel (0.25%), and transportation equipment (0.05%) showed upward trends. Conversely, medical precision (3.75%), banking (3.42%), and steel and metals (1.71%) recorded declines.

Lee Kyungmin, a researcher at Daishin Securities, analyzed, "Despite the hawkish ECB meeting results, the euro temporarily strengthened the previous night. Subsequently, expectations of economic burdens on member countries due to accelerated tightening and inflation outlook levels caused a reversal to weakness, and the dollar strengthened again. Accordingly, the won-dollar exchange rate surged to the high 1260 won range, acting as a negative factor for foreign demand." On that day, the won-dollar exchange rate closed at 1268.90 won, up 12 won (0.95%) from the previous day.

The KOSDAQ also closed down 0.83% at 869.86. While individuals net bought 70.3 billion won, foreign and institutional investors net sold 49.4 billion won and 22.1 billion won respectively, leading to a decline in the index.

Among all stocks, 1,002 stocks fell, and most of the top market capitalization stocks also declined. HLB fell 5.32%, Celltrion Healthcare -3.48%, Celltrion Pharm -2.79%, L&F -2.23%, and Pearl Abyss -2.21% in order.

Asian stock markets showed mixed trends that day. China recorded the lowest May PPI growth rate in 14 months (6.4% year-on-year, previous 8%), and the Shanghai Composite Index initially fell 0.87% but then sharply reversed. Meanwhile, the Hong Kong Hang Seng Index and Japan's Nikkei Index fell 0.52% and 1.5%, respectively.