Domestic Stock Market Battles Around Steady Range Ahead of US FOMC... KOSPI Fluctuates Around 2390 Level

[Image source=Yonhap News]

[Asia Economy Reporter Ji Yeon-jin] The domestic stock market showed mixed trends within a narrow range on the 25th. Ahead of the U.S. Federal Open Market Committee (FOMC) interest rate decision scheduled for the 27th (local time), the KOSPI index is engaged in a narrow-range battle amid simultaneous buying by foreigners and institutions. The KOSDAQ index turned downward again during the session, with individual investors mounting a tough defense.

As of 10:32 a.m., the KOSPI index was trading at 2,392.32, down 0.82 points (0.03%) from the previous session. The index started weak but reversed to an upward trend shortly after the opening due to active buying by foreigners and institutions, then moved within a slightly declining range as selling by individuals expanded during the session.

At the same time, foreigners were net buyers worth approximately 59.6 billion KRW, and institutions also recorded net purchases of about 45 billion KRW. However, individuals, who had been net sellers since early in the session, sold about 105.8 billion KRW net.

Among the top market capitalization stocks on the KOSPI, Hyundai Motor and Hyundai Mobis, which attracted strong foreign buying, recorded gains of over 2%, while Kia showed an increase of around 1%. Samsung Electronics and Samsung Biologics were also slightly up. However, LG Energy Solution, LG Chem, and Samsung SDI fell more than 1%, and NAVER recorded a decline exceeding 2%. This is attributed to concerns over earnings for platform companies following social media company Snap's second-quarter earnings shock in the U.S. market.

Snap was the first among companies highly dependent on digital advertising revenue to release earnings, raising concerns about the earnings outlook for other tech companies reliant on advertising revenue.

However, the market atmosphere is cautious ahead of the FOMC meeting. While the prevailing view is that the U.S. Federal Reserve (Fed) will implement another giant step (a 75 basis point rate hike), market sentiment could shift depending on the tone of Federal Reserve Chair Jerome Powell's remarks. Seo Sang-young, a researcher at Mirae Asset Securities, said, "Contrary to market concerns, the possibility of mentioning aggressive rate hikes is expected to be limited, which should act as a neutral or better factor for the stock market."

The KOSDAQ index was down 5.79 points (0.73%) at 783.96. While individuals were net buyers worth about 79.2 billion KRW, foreigners and institutions were net sellers of approximately 62.7 billion KRW and 17.5 billion KRW, respectively. Lee Kyung-min, a researcher at Daishin Securities, said, "The second-quarter earnings season is serving as an opportunity to confirm the gap between earnings and stock prices, creating a favorable atmosphere for the stock market. However, it is true that it is difficult to gauge the direction of the global financial market based on major countries' monetary policies and economic indicators. It is an important moment to see whether the vicious cycle among inflation, monetary policy, and the economy will continue or shift to a virtuous cycle."

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