Investor Sentiment Frozen by Tightening Concerns and Strong Dollar... KOSPI Closes Below 2440 Next Week

[Image source=Yonhap News]

[Asia Economy Reporter Myunghwan Lee] On the 23rd, the KOSPI closed below the 2440 level. It appears that investor sentiment worsened due to concerns that high-intensity tightening could continue ahead of this week's Jackson Hole meeting. The won-dollar exchange rate also hit a new high again following the previous day, which is estimated to have influenced the index decline.

On the day, the KOSPI closed at 2435.34, down 1.10% (27.16 points) from the previous trading day. The KOSPI opened the session down 0.54% (13.19 points) at 2449.31 and reduced some of the losses during the morning session. However, in the afternoon session, the decline widened, and the drop rate exceeded 1%.

By investor type, individuals and foreigners bought stocks worth 139 billion KRW and 100 million KRW respectively, while institutions alone sold a net 132 billion KRW. Foreigners, who had been net sellers during the afternoon session, turned to slight net buying by purchasing stocks near the market close.

Regarding the market decline, Kim Seok-hwan, a researcher at Mirae Asset Securities, explained, "The U.S. stock market fell mainly in tech stocks the previous day, which also dampened domestic investor sentiment. The dollar's strength further expanded, causing a broad weakness in the index."

Most of the top market capitalization stocks also fell. Samsung Electronics closed at 59,100 KRW, down 1.50% (900 KRW) from the previous day, dropping below the '60,000 KRW' mark. SK Hynix also closed down 1.68%. LG Chem (-2.97%), Samsung Biologics (-2.59%), and Samsung SDI (-2.17%) also experienced significant declines. In contrast, LG Energy Solution was the only gainer, closing up 0.56% (2,500 KRW) at 445,000 KRW. Hyundai Motor closed unchanged at 189,000 KRW.

Most sector indices in the KOSPI market also declined. Machinery (1.71%) and transportation equipment (0.97%) rose, while pharmaceuticals (-2.63%), food and beverages (-2.42%), and precision medical instruments (-2.13%) fell.

The KOSDAQ index closed at 783.42, down 1.56% (12.45 points) from the previous day. The KOSDAQ opened down 0.74% (5.92 points) at 789.95 and widened losses in the afternoon.

By investor type, institutions were the sole net sellers with 63.2 billion KRW, while individuals and foreigners bought 38.4 billion KRW and 19.5 billion KRW respectively.

All top market capitalization stocks in KOSDAQ closed in the red. HLB fell sharply by 4.92% (2,250 KRW) to 43,450 KRW. Other pharmaceutical-related stocks such as Celltrion Healthcare (-3.23%), Alteogen (-3.18%), and Celltrion Pharm (-2.99%) also declined. Secondary battery stocks including EcoPro (-2.56%), L&F (-2.29%), Cheonbo (-1.99%), and EcoPro BM (-1.33%) also fell.

By sector in KOSDAQ, only metals (0.61%) and construction (0.10%) rose slightly, while telecommunications services (-3.27%), entertainment and culture (-2.57%), and distribution (-2.32%) experienced significant declines.

Meanwhile, in the Seoul foreign exchange market, the won-dollar exchange rate closed at 1,345.5 KRW, up 5.7 KRW from the previous day, setting a new high again. Researcher Kim said, "The won-dollar exchange rate initially declined due to verbal intervention by the Bank of Korea and other foreign exchange authorities early in the session, but turned to an upward trend again due to yuan weakness and increased foreign selling, surpassing 1,342 KRW during the session. Exchange rate volatility is expected to expand as market participants remain cautious about this week's Jackson Hole meeting and concerns over a European economic recession."

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