KOSPI Ends Lower Below 2320 Amid FOMC Caution and Dollar Strength

[Image source=Yonhap News]

[Asia Economy Reporter Myung-Hwan Lee] On the 12th, the KOSPI closed down nearly 1% due to caution ahead of the Bank of Korea's Monetary Policy Committee (MPC) meeting and a contraction in foreign demand caused by the strong dollar.

On that day, the KOSPI closed at 2,317.76, down 0.96% (22.51 points) from the previous trading day. The KOSPI opened at 2,330.88, down 0.40% (9.39 points) from the previous day, gradually widened its decline, and then slightly rose near the end of the session. By investor type, individuals were the only net buyers with purchases worth 267.5 billion KRW, while foreigners and institutions sold 45 billion KRW and 238.5 billion KRW respectively.

Among the top 10 KOSPI market capitalization stocks, NAVER showed a noticeable decline, closing at 233,500 KRW, down 2.91% (7,000 KRW) from the previous day. Samsung Electronics also fell 1.19% (700 KRW) to close at 58,100 KRW. Other stocks that closed lower included Samsung Electronics Preferred (-2.40%), LG Chem (-1.53%), and SK Hynix (-0.43%). On the other hand, LG Energy Solution rose 1.52% despite the overall downtrend. Samsung Biologics (0.60%), Samsung SDI (0.19%), and Kia (0.90%) also increased.

By sector, insurance (1.46%), electric and gas utilities (0.93%), and pharmaceuticals (0.77%) rose, while non-metallic minerals (-3.33%), securities (-3.26%), and textiles and apparel (-2.93%) experienced significant declines.

The KOSDAQ index closed at 750.78, down 2.12% (16.26 points) from the previous day. The KOSDAQ started at 762.18, down 0.63% (4.86 points), and gradually extended its decline. Among investors, individuals were the sole net buyers with purchases worth 305.9 billion KRW, while foreigners and institutions sold 156 billion KRW and 132.5 billion KRW respectively.

Among the top market capitalization stocks on the KOSDAQ, Studio Dragon recorded the largest drop, closing at 71,300 KRW, down 4.68% (3,500 KRW) from the previous day. L&F (-3.95%), EcoPro BM (-3.23%), and Pearl Abyss (-3.20%) also saw large declines. Conversely, HLB closed up 3.33% (1,350 KRW) at 41,850 KRW.

Most major KOSDAQ sectors also declined. Computer services (0.26%) and pharmaceuticals (0.02%) rose slightly, while semiconductors (-4.37%), non-metallic minerals (-4.31%), and paper and wood (-4.30%) fell.

Seok-Hwan Kim, a researcher at Mirae Asset Securities, commented on the market decline, saying, "The market showed a weak trend due to concerns over the resurgence of COVID-19, the U.S. stock market's decline amid earnings season caution, and the intensification of the strong dollar, which dampened investor sentiment." He added, "Ahead of the MPC meeting, caution over the expected 'big step' (a 0.5 percentage point hike in the base interest rate at once) also increased."

The U.S. Consumer Price Index (CPI), which will be announced on the same day as the MPC meeting, also seemed to influence investor sentiment. Kyung-Min Lee, a researcher at Daishin Securities, noted, "Ahead of the U.S. June CPI announcement, White House spokesperson Jen Psaki mentioned that the June consumer price index would be at a considerably high level, which led to increased investor caution regarding the results."

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