KOSPI Rises, KOSDAQ Ends Flat... Cautious Stance Ahead of FOMC

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[Asia Economy Reporter Lee Jung-yoon] The KOSPI index closed above the 2410 level for the second consecutive trading day, driven by net buying from foreigners and institutions. The KOSDAQ index engaged in a tug-of-war around the 790 level but ended the session with a slight gain.

On the 26th, the KOSPI index closed at 2412.96, up 9.27 points (0.39%) from the previous trading day. The index opened at 2397.27, down 6.42 points (0.27%) from the previous close, fluctuated in the early session, and then began to rise around 10 a.m., extending gains. With two consecutive days of gains, net buying by foreigners and institutions was evident. Foreigners and institutions net bought approximately 1.6 billion KRW and 46.3 billion KRW respectively, driving the index higher. Conversely, individual investors net sold about 47.9 billion KRW.

Among the top market capitalization stocks, LG Chem recorded the largest gain, rising 1.98%. Semiconductor stocks also showed strength, with Samsung Electronics and SK Hynix rising 0.98% and 0.50%, respectively. Additionally, Samsung SDI (0.90%), LG Energy Solution (0.77%), and Kia (0.24%) also increased. LG Energy Solution surged more than 2% intraday after announcing plans to establish a battery recycling joint venture with China’s leading cobalt refiner Huayou Cobalt to extract key raw materials from used batteries, ahead of the lock-up expiration on the 27th. Naver (NAVER) (-1.21%), Kakao (-0.82%), and Samsung Biologics (-0.12%) declined, while Hyundai Motor remained flat.

By sector, construction (1.43%), textiles and apparel (1.32%), telecommunications (1.03%), chemicals (0.88%), paper and wood (0.88%), machinery (0.84%), non-metallic minerals (0.82%), and electrical and electronics (0.76%) rose. In contrast, services (-0.51%), finance (-0.28%), and insurance (-0.25%) closed lower.

The KOSDAQ index closed at 789.93, up 0.24 points (0.03%). The index battled around the 790 level throughout the day but failed to reclaim it. However, it ended higher due to net buying by individual investors, who purchased about 68.8 billion KRW worth of shares. Foreigners and institutions net sold approximately 53.4 billion KRW and 10.2 billion KRW, respectively.

Among the top market cap stocks on KOSDAQ, Alteogen showed the largest gain at 2.43%, followed by Kakao Games (2.23%), L&F (2.03%), Celltrion Pharm (0.37%), and HLB (0.12%). Pearl Abyss (-1.89%), Studio Dragon (-1.18%), Chunbo (-0.90%), and EcoPro BM (-0.68%) declined. Celltrion Healthcare remained flat.

Market analysts attribute the cautious trading to investors awaiting the U.S. Federal Open Market Committee (FOMC) meeting scheduled for the 27th (local time), along with various economic indicators and earnings announcements. The U.S. Federal Reserve is expected to implement a giant step by raising the benchmark interest rate by 0.75 percentage points at the FOMC meeting. Lee Kyung-min, a researcher at Daishin Securities, explained, "In the absence of clear upward momentum, investors adopted a wait-and-see stance ahead of the U.S. big tech earnings announcements, closely monitoring the U.S. Q2 GDP growth rate and the July FOMC."

Kim Seok-hwan, a researcher at Mirae Asset Securities, said, "Although mixed trends appeared due to cautious trading ahead of the FOMC and major big tech earnings announcements, the market settled higher thanks to a shift to weakness in aluminum and strength in semiconductor stocks. Semiconductor shares gained on expectations for the passage of the U.S. semiconductor support bill and news that SK Group Chairman Chey Tae-won is scheduled for a virtual meeting with U.S. President Joe Biden." The won-dollar exchange rate closed at 1,307.6 KRW, down 6.1 KRW from the previous day’s close.

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