Bear Market Rally Turning Point, Mixed Close in Stock Market... Auto and Defense Stocks Strong (Comprehensive)

KOSPI Rises 0.44% with Foreign and Institutional Buyers, Recovers 2400 Level
KOSDAQ Turns Downward Late in Session, Closes at 789.70

[Image source=Yonhap News]

[Asia Economy Reporter Ji Yeon-jin] The domestic stock market closed mixed on the 25th. Ahead of major domestic and international events such as the Federal Open Market Committee (FOMC), which has signaled additional interest rate hikes in the U.S., and earnings announcements from major U.S. big tech companies like Microsoft (MS), Apple, Amazon, as well as large domestic stocks including SK Hynix, the main indices engaged in fierce battles within a narrow range.

The KOSPI index closed at 2,406.60, up 13.46 points (0.44%) from the previous day. After retreating to the 2,200 level earlier this month, the KOSPI recently rebounded and recovered the 2,400 mark on the 21st, but then fell back to the 2,390 level the next day due to poor earnings from U.S. tech companies. In fact, U.S. social media company Snap plunged sharply in the New York market on the 22nd (local time), dampening investor sentiment. However, the domestic market had already priced in this issue, leading to inflows of buying from foreigners and institutions. Institutions led the market by net buying about 192.3 billion KRW, and foreigners also supported the market by purchasing about 97.5 billion KRW. Individuals were net sellers, offloading about 285.7 billion KRW.

In particular, the KOSPI market showed strength centered on automobile stocks that reported solid second-quarter earnings. Hyundai Motor rose 2.62% to close higher after news that it is expected to receive incentives worth around 2 trillion KRW from the Georgia state government for its U.S. electric vehicle factory construction project and following a second-quarter earnings surprise that restored investor sentiment. Kia also showed a strong performance, rising 1.73%. Hyundai Mobis recorded a 3.43% increase. LG Energy Solution jumped 2.36% due to combined buying from foreigners and institutions. On the other hand, Samsung Electronics, which showed strength early in the session, ended down 0.33% at 61,100 KRW after foreigners switched to selling in the final stages. Samsung SDI fell 1.76%, while SK Hynix and Samsung Biologics closed flat.

Additionally, defense industry stocks such as Korea Aerospace Industries (5.91%), Hanwha Aerospace (3.61%), and Hyundai Rotem (2.66%) also showed strength. The Polish government's plan to purchase Korean-made weapons and the possibility of Hanwha Group integrating its defense affiliates acted as positive factors.

Kim Seok-hwan, a researcher at Mirae Asset Securities, said, "Although the U.S. stock market declined due to weak earnings from Snap and Seagate, the impact was limited as the domestic market had already priced this in on Friday. The index rose due to inflows of buying from foreigners and institutions." He added, "At the FOMC, rather than the 'magnitude' of the rate hike, it will be important to observe how the Fed's actions are affecting consumers and the market's judgment regarding the Fed's credibility."

The KOSDAQ index closed down 0.05 points (0.01%) at 789.70. The KOSDAQ index saw a day-long battle around the 790 level. Individuals were net buyers of about 72.3 billion KRW, foreigners were net sellers of about 67.5 billion KRW, and institutions recorded net buying of 3.6 billion KRW.

Celltrion Pharm rose 3.80% following news of launching the world's first transdermal dementia drug, and Celltrion Healthcare also showed strength, rising 2.22%. Kakao Games fell more than 3% intraday but closed down 1.10% after news that its subsidiary Lionheart Studio will begin IPO procedures within the year. Amid rumors of the sale of cryptocurrency exchange Bithumb, Vidente, which holds shares in Bithumb, closed at the daily upper limit, and Chorokbaem Media also closed up 23.92%. Han Ji-young, a researcher at Kiwoom Securities, said, "It is true that major export stocks such as Hyundai Motor and Kia, which announced earnings last week, are posting better-than-expected results, leading to a relatively favorable earnings season. However, given that the second-quarter earnings results and guidance of large-cap stocks scheduled for this week could drastically change overall KOSPI profit forecasts, it is necessary to pay attention to these companies' earnings events as well."

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