Crushed by 'High-Intensity Tightening,' KOSPI Approaches 2400 Breakdown... 'Soaring Exchange Rate' Drives Foreigners Away

[Image source=Yonhap News]

[Asia Economy Reporter Lee Seon-ae] On the 15th, the KOSPI, which started higher, eventually turned "blue" in the afternoon and barely held above 2400 points, closing just above the line. It is effectively at the brink of breaking below 2400 points. It failed to overcome concerns over high inflation and aggressive tightening. Worsening macro conditions such as a high exchange rate also increased downward pressure on the index. Despite individual investors being the sole buyers in a tug-of-war against foreign and institutional investors' joint selling, it was insufficient to defend the index from falling.

On that day, the KOSPI index closed at 2401.83, down 9.59 points (0.4%) from the previous day. The index opened at 2416.01, up 4.59 points (0.19%), and maintained a generally upward trend during the morning but shifted to a downward trend in the afternoon. Individual investors bought a net 349.7 billion KRW to defend the index, but foreign and institutional investors sold 223.6 billion KRW and 144.5 billion KRW respectively, countering this effort.

The KOSDAQ index also declined. It closed at 781.38, down 1.55 points (0.2%) from the previous day. While individual and institutional investors bought net amounts of approximately 110.5 billion KRW and 31.7 billion KRW respectively, foreign investors alone sold about 144.9 billion KRW.

It is interpreted that foreign investors are effectively turning their backs on the domestic market again. This is also detected in the futures market. Foreign investors showed a net selling dominance of 508.3 billion KRW in the KOSPI 200 futures market.

Kim Seok-hwan, a researcher at Mirae Asset Securities, said, "Concerns over U.S. inflation pressures and aggressive tightening continued to burden the domestic stock market," adding, "The sustained strong dollar trend expanded foreign selling, and the weak trend in the Chinese stock market during the session limited the index's rise."

Lee Kyung-min, a researcher at Daishin Securities, said, "Influenced by the U.S. stock market closing higher, the KOSPI maintained a slightly firm range in the morning while digesting the U.S. inflation shock issue, but with no particular upward momentum and expanded net selling by foreign investors in both cash and futures, it turned to a decline in the afternoon."

Most of the top market capitalization stocks also closed lower. In the KOSPI market, Samsung Biologics and Hyundai Mobis fell by over 2%. Samsung Electronics, SK Hynix, NAVER, and Kakao each closed down about 1%. Only LG Energy Solution showed a rise of over 2%. In the KOSDAQ market, EcoPro showed strong gains of 8.26%. Conversely, HLB (-5.65%), EcoPro BM (-3.18%), and L&F (-2.29%) showed weakness.

In the Seoul foreign exchange market that day, the won-dollar exchange rate closed at 1393.7 won, up 2.8 won from the previous trading day. When the exchange rate exceeded 1397 won during the session, verbal intervention by the government temporarily lowered it to 1391 won, but the continued strength of the dollar caused the rate to rise again. Seo Sang-young, a researcher at Mirae Asset Securities, said, "If there had been no verbal intervention by the government, it is estimated that the rate would have exceeded 1400 won during the session."

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