High Exchange Rate and Institutional Selling Continue to Weigh on KOSPI... Sideways Movement Around 2470 Level

[Image source=Yonhap News]

[Asia Economy Reporter Myunghwan Lee] The KOSPI continued its downward trend in the morning session on the 22nd due to the impact of a high exchange rate. Institutional investors are fueling the index decline by selling nearly 150 billion KRW in the securities market.

As of 10:50 a.m. on the day, the KOSPI stood at 2,472.45, down 0.81% (20.24 points) from the previous trading day. The KOSPI opened at 2,467.38, down 1.02% (25.31 points), and has since slightly reduced its decline.

By investor type, individuals and foreigners bought stocks worth 122.2 billion KRW and 29 billion KRW respectively, while institutions alone sold stocks worth 148.7 billion KRW.

The decline in the domestic stock market appears to be influenced by the strong dollar. As of 9 a.m., the won-dollar exchange rate in the Seoul foreign exchange market was 1,335.5 won per dollar, up 9.6 won from the previous day's closing price. The exchange rate surpassing the 1,330 won level is the highest since April 29, 2009, when it reached 1,357.5 won, marking about 13 years and 4 months.

Most of the top 10 stocks by market capitalization in the securities market are declining. Samsung Electronics is trading at 60,200 KRW, down 1.15% (700 KRW) from the previous day, and SK Hynix is also down 1.14% (1,100 KRW) at 446,500 KRW. Kakao (-2.09%) and Naver (NAVER) (-1.01%) are also experiencing significant declines. LG Chem is the only stock rising, up 0.47% (3,000 KRW) to 643,000 KRW. Hyundai Motor is trading unchanged at 190,000 KRW.

By sector on the KOSPI, non-metallic minerals (0.60%) and telecommunications (-0.29%) are slightly up, while most sectors are down. The decline is particularly notable in securities (-1.58%), steel and metals (-1.48%), and transportation and warehousing (-1.29%).

At the same time, the KOSDAQ index is at 805.22, down 1.10% (8.95 points) from the previous day. The KOSDAQ opened at 806.90, down 0.89% (7.27 points), and has since slightly reduced its losses.

By investor type, individuals are the sole net buyers with 90.6 billion KRW, while foreigners and institutions sold 4.5 billion KRW and 77.7 billion KRW respectively.

Most of the top market capitalization stocks on the KOSDAQ are also declining. Cheonbo (-1.56%), Kakao Games (-1.44%), and Pearl Abyss (-1.21%) are down by around 1%. HLB (1.08%), Celltrion Healthcare (0.40%), and EcoPro BM (0.35%) are rising.

By sector, food and tobacco rose 1.42%, showing an upward trend, while telecommunications services (-4.02%), broadcasting services (-2.42%), and publishing and reproduction (-2.12%) are experiencing significant declines.

Analysts in the securities industry say that the direction of the domestic stock market this week will be influenced by the Jackson Hole meeting and the Bank of Korea’s Monetary Policy Committee (MPC) results. Ji-young Han, a researcher at Kiwoom Securities, said, "At the Jackson Hole meeting, central bank governors including the U.S. Federal Reserve (Fed) are expected to send hawkish signals to the market," adding, "The uncertainty surrounding the detailed outcomes of the Jackson Hole meeting, scheduled for the weekend in Korean time, is expected to persist in the domestic stock market from early this week."

Kyung-min Lee, a researcher at Daishin Securities, commented on the Bank of Korea MPC scheduled for the 25th, saying, "With additional rate hikes already factored in, there is a high possibility that expectations for a slowdown in monetary policy will arise alongside downward revisions to economic forecasts and upward revisions to inflation forecasts," and added, "In this case, it is expected to provide momentum for a rebound in the relatively underperforming domestic stock market compared to global markets."

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