[Morning Market Update] China’s 3 Major Indicators Exceed Expectations... Battery and Automobile Stocks Rise

KOSPI Holds at 2380 Level
Foreigners and Institutions Continuously 'Sell' Since Market Open
KOSPI Rises with LG Energy Solution Following Automakers
SM Terminates Contract with Lee Soo-man's Private Company
Surges Over 10% Right After Opening... Currently Up Around 16%

On the 16th, when the won-dollar exchange rate started to rise, dealers were working in the dealing room of Hana Bank in Euljiro, Seoul. Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Hwang Yoon-joo] On the morning of the 16th, the KOSPI, which started off lower, continues to show weakness. Economic indicators from China, including retail sales, industrial production, and fixed asset investment, released this morning, came out higher than expected, and the exchange rate slightly declined, maintaining downward rigidity. In the KOSPI market, LG Energy Solution, along with automobiles, has also turned to an upward trend.

On this day, the KOSPI opened at 2,387.56, down 0.59% (-14.27 points). As of 11:25 a.m., the KOSPI is recording 2,388.29, down 0.56% (-13.54 points).

From the opening, only individual investors have been net buyers. At this time, individuals are net buying 331.2 billion KRW. Foreigners and institutions are net selling 129 billion KRW and 207.5 billion KRW, respectively. However, in the futures market, individuals and foreigners are selling 121.2 billion KRW and 52.1 billion KRW, respectively.

In the securities market, the most important issues influencing the market flow today are the exchange rate and Chinese economic indicators. The three major Chinese economic indicators released this morning all rose thanks to the Chinese government's strong economic stimulus policies.

The August retail sales growth rate, which reflects domestic demand, rose 5.4% compared to the same period last year. This exceeded both the previous month (+2.7%) and market expectations (+3.5%).

This is the first time in six months that China's monthly retail sales have exceeded 5%, since 6.7% in February this year. The resurgence of COVID-19 led to lockdowns in major areas such as Shanghai. In particular, retail sales dropped to -11.1% in April when the Shanghai lockdown began.

The industrial production growth rate, an indicator of corporate activity, was 4.2%, surpassing both the previous month and the forecast (3.8%) by 0.4 percentage points. Fixed asset investment (January to August) rose slightly to 5.8%, successfully rebounding after five consecutive months of decline. However, this was only a 0.1 percentage point increase compared to the previous month’s 5.7% (forecast 5.5%).

[Image source=Yonhap News]

Among the top market capitalization stocks, only automobiles and batteries are on the rise. Hyundai Motor and Kia have increased their gains since the opening, rising 1.77% and 1.13%, respectively. LG Energy Solution, which started off lower, is up 0.78%. Samsung SDI switched to an upward trend during the session but is now down 0.65% again.

SK Hynix fell 1.96%, showing the largest decline, while LG Chem and Naver are down 1.82% and 1.77%, respectively. Samsung Electronics, which hit a new low (closing price basis 55,600 KRW) on the 8th, has slightly rebounded but remains down 0.18% at 55,900 KRW.

On this day, the won-dollar exchange rate opened at 1,399.0 KRW, up 5.3 KRW from the previous day, but fell to 1,396.30 KRW during the morning session. Foreign exchange dealers expect the exchange rate to range between 1,392 KRW and 1,403 KRW.

[Image source=Yonhap News]

As of 11:45 a.m., the KOSDAQ is at 776.05, down 0.67% (-5.33 points) from the previous day. The KOSDAQ opened at 776.49, down 0.63% (-4.89 points), and has been gradually widening its losses since the opening.

Similar to the KOSPI, the downward pressure is being defended by individual buying. Individuals are purchasing 126.3 billion KRW worth of stocks. Foreigners and institutions are selling 77.6 billion KRW and 41.8 billion KRW, respectively.

A notable stock in the KOSDAQ market is SM. Following the announcement of contract termination with Lee Soo-man’s personal company Like Planning on the previous day, SM showed a 10% rise immediately after the opening. It is currently trading at 74,900 KRW, up 16.28% from the previous day.

Among the top market capitalization stocks, unlike the mixed trend at the opening, only HLB (+1.53%) is on the rise.

Celltrion Healthcare fell 2.61%, EcoPro BM dropped 2.33%, and Celltrion Pharm declined 2.27%, showing the highest rates of decline. The rest are down slightly in the 0% range.

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