Foreigners 'Saja'... KOSPI Closes Above 2430 Level, Recovering After 29 Trading Days

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[Asia Economy Reporter Lee Jung-yoon] The KOSPI index closed trading above the 2430 level for the first time in 29 trading days. Despite the U.S. Federal Reserve's (Fed) giant step (a 75 basis point hike in the benchmark interest rate), foreign investors showed a buying preference due to the hike meeting expectations and the U.S. stock market's relief rally.

On the 28th, the KOSPI index closed at 2435.27, up 19.74 points (0.82%) from the previous trading day. The index opened at 2437.04, up 22.04 points (0.91%) from the previous close. Although the rise was limited due to selling pressure from individuals and institutions, the inflow of foreign funds led to a fourth consecutive day of gains. Foreign investors net purchased about 409.6 billion KRW, driving the index up, while individuals and institutions sold about 328.2 billion KRW and 57.8 billion KRW respectively.

Among the top market capitalization stocks, LG Chem recorded the largest gain, rising 5.84%, driven by expectations for growth in the cathode materials business. LG Energy Solution, which aims to triple sales within five years and is expected to improve profitability in the second half, followed with a 5.59% increase. Samsung SDI (3.96%), Samsung Biologics (2.62%), Kakao (0.70%), NAVER (0.41%), and Samsung Electronics (0.16%) also showed strength. Conversely, SK Hynix (-0.60%), Hyundai Motor (-0.51%), and Kia (-0.37%) declined.

By sector, non-metallic minerals rose 7.96%, influenced by Posco Chemical's 16.81% surge. Posco Chemical secured an additional order worth 13.7696 trillion KRW from General Motors (GM) for cathode materials, a key component of electric vehicle batteries. Following were chemical (1.83%), machinery (1.47%), steel & metals (1.18%), electrical & electronics (1.16%), and manufacturing (1.14%) sectors showing gains. Meanwhile, medical precision (-1.57%), construction (-1.45%), transportation & warehousing (-0.98%), food & beverage (-0.39%), and telecommunications (-0.24%) sectors declined.

The previous day, the Fed announced after the Federal Open Market Committee (FOMC) regular meeting that it would raise the federal funds rate by 0.75 percentage points from 1.50-1.75% to 2.25-2.50%. Following Fed Chair Jerome Powell's statement that "as the monetary policy stance becomes more restrictive, it seems appropriate to slow the pace of rate hikes at some point," the U.S. stock market surged. The Nasdaq index closed up 469.85 points (4.06%) at 12,032.42. The Dow Jones Industrial Average rose 436.05 points (1.37%) to 32,197.59, and the large-cap S&P 500 index closed at 4,023.61, up 102.56 points (2.62%).

Lee Kyung-min, a researcher at Daishin Securities, explained, "The 75 basis point rate hike at the July FOMC met market expectations, and following Fed Chair Powell's press conference, concerns about a recession eased and the possibility of a flexible monetary policy led to relief sentiment." He added, "From a supply-demand perspective, the decline in the won-dollar exchange rate positively influenced foreign capital inflows, contributing to the KOSPI's rise." However, he noted, "The U.S. after-hours futures turned bearish, somewhat limiting the KOSPI's gains compared to the previous U.S. market." The won-dollar exchange rate closed at 1296.1 KRW, down 17.2 KRW from the previous close, falling below 1300 KRW for the first time in 15 trading days.

Kim Seok-hwan, a researcher at Mirae Asset Securities, also evaluated that "relief came as the market welcomed Fed Chair Powell's remarks on slowing the pace of rate hikes, restoring risk appetite."

The KOSDAQ index closed at 798.32, up 2.62 points (0.33%) from the previous trading day. The index opened at 802.50 but gains were limited afterward, and it closed without recovering the 800 level. Individuals net purchased about 41.2 billion KRW, while foreign investors and institutions net sold about 6.7 billion KRW and 29.5 billion KRW respectively.

Among the top market capitalization stocks, Cheonbo rose 2.77%, followed by EcoPro BM (1.45%), Celltrion Healthcare (1.40%), Pearl Abyss (1.17%), Celltrion Pharm (0.95%), L&F (0.71%), Kakao Games (0.50%), and Studio Dragon (0.27%). Conversely, Alteogen (-1.04%) and HLB (-0.73%) showed weakness.

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