Foreign and Institutional Selling Pushes KOSPI Down to 2400 Level... Lack of Upward Momentum and Soaring Exchange Rates

[Image source=Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] The KOSPI index, which had been rising during the session, closed lower for the second consecutive trading day as foreigners and institutions offloaded shares. Analysts attribute the decline to the absence of upward momentum and the Korean won to US dollar exchange rate surpassing 1360 won, triggering a downturn.

On the 2nd, the KOSPI index closed at 2409.41, down 6.20 points (0.26%) from the previous day. The index opened at 2427.70, up 12.09 points (0.50%). However, due to the rise in the won-dollar exchange rate, foreigners showed selling pressure in the latter part of the session, and institutions also sold off shares, causing the index to turn downward. It fell as low as 2402.67 during the session, putting the 2400 level at risk. This was the first time since July 25 that the KOSPI index closed around the 2400 level. Foreigners and institutions net sold approximately 178.9 billion won and 135.7 billion won respectively, while individuals alone net bought about 291.3 billion won, helping to defend against further index decline.

Among the top market capitalization stocks, LG Chem fell the most, dropping 2.09%. It was followed by Kakao (-1.68%), Samsung Electronics (-1.54%), Naver (-0.85%), and SK Hynix (-0.76%). On the other hand, LG Energy Solution, which is expected to expand its market share in the US energy storage system (ESS) market following the passage of the Inflation Reduction Act (IRA), rose 4.10%. Samsung Biologics also increased by 1.45%. With July sales figures announced, Kia and Hyundai Motor, which showed a rebound in global wholesale sales trends, rose 0.75% and 0.51% respectively, and Samsung SDI closed up 0.17%.

By sector, steel and metals (-2.48%), electric and gas utilities (-1.36%), services (-0.80%), machinery (-0.55%), transportation and warehousing (-0.52%), chemicals (-0.42%), and securities (-0.38%) showed weakness. Meanwhile, textiles and apparel (1.65%), insurance (1.56%), pharmaceuticals (0.56%), transportation equipment (0.44%), and telecommunications (0.38%) rose. The food and beverage and non-metallic minerals sectors also recorded gains of 0.1% each.

Lee Kyung-min, a researcher at Daishin Securities, explained, "In a still uncertain environment, the absence of any special upward momentum led to a reversal into a decline."

Kim Seok-hwan, a researcher at Mirae Asset Securities, said, "The lack of upward momentum and continued dollar strength expanded selling pressure from foreigners and institutions, leading to a decline. The yen also surpassed 140 yen for the first time in 24 years, intensifying yen weakness and causing the won to weaken in tandem."

On this day, the won-dollar exchange rate exceeded 1360 won for the first time in 13 years and 5 months. It closed at 1362 won, up 7.7 won from the previous day's closing price. This is the highest closing level since April 1, 2009.

The KOSDAQ index fluctuated between gains and losses but ultimately closed lower for the second consecutive trading day. The KOSDAQ index ended the day at 785.88, down 2.44 points (0.31%) from the previous day. Individuals and institutions net bought about 52.5 billion won and 12.3 billion won respectively, but foreigners sold about 78.3 billion won.

Among the top market capitalization stocks, Celltrion Pharm (-1.19%), EcoPro (-0.89%), EcoPro BM (-0.47%), and L&F (-0.45%) showed weakness. Conversely, Alteogen (1.32%), Studio Dragon (0.54%), and Celltrion Healthcare (0.14%) rose. HLB, Kakao Games, and Pearl Abyss remained flat.

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