US FOMC Sparks Caution... Kosdaq Drops Sharply Amid King Dollar

USD-KRW Exchange Rate Surges to 1,395 Won Intraday
KOSDAQ Records Over 1% Decline in the Afternoon

[Image source=Yonhap News]

[Asia Economy Reporter Ji Yeon-jin] The domestic stock market continued its downward trend on the 21st as caution toward risk assets spread ahead of the U.S. Federal Open Market Committee (FOMC) interest rate hike decision. The KOSDAQ index, which showed a slight decline in early trading, recorded a drop of over 1% as the won-dollar exchange rate rose again, intensifying foreign selling pressure.

As of 2:14 p.m. on the day, the KOSPI index was trading at 2,344.82, down 23.03 points (0.97%) from the previous day.

On this day, the KOSPI widened its losses amid growing caution ahead of the U.S. FOMC, with continued buying by foreigners and institutions. Foreigners and institutions sold a net 251.6 billion won and 79.6 billion won worth of stocks respectively in the KOSPI market, pulling the index down. In contrast, individual investors focused all efforts on defending the index by net buying about 322.7 billion won worth of stocks.

The won-dollar exchange rate surged to 1,395 won during the day, fueling foreign selling pressure. Lee Jin-woo, head of investment strategy at Meritz Securities, said, "The domestic stock market is cautious ahead of the big event, the FOMC. If the year-end benchmark interest rate consensus of 4.5% or higher is broken tomorrow morning, the market shock could be significant. However, since the giant step has already been priced in, there may not be major changes going forward."

Samsung SDI showed the largest decline, dropping more than 3% amid simultaneous selling by foreigners and institutions. Samsung Electronics fell to 55,100 won, breaking its 52-week high, while NAVER and Kakao also recorded intraday declines of 2.75% and 2.60%, respectively, breaking their highs for the day.

Additionally, Samsung Biologics, Hyundai Motor, and Kia recorded losses exceeding 1%. LG Energy Solution slightly reduced its losses in the afternoon, showing a slight decline, and SK Hynix remained flat during the day.

At the same time, the KOSDAQ index was trading at 752.76, down 7.59 points (1.00%). Individual investors net bought about 111.2 billion won, while foreigners and institutions net sold 88.6 billion won and 15.5 billion won, respectively.

Among the top market capitalization stocks on KOSDAQ, EcoPro BM expanded its intraday gains, trading up 1.37% at 103,400 won. Pearl Abyss and EcoPro were trading with slight gains.

On the other hand, Celltrion Healthcare was down more than 3.4%, and Celltrion Pharm showed a decline of 2.5%. L&F and HLB recorded losses of 1.44% and 1.51%, respectively, while Kakao Games, which had been slightly up in early trading, fell 0.86%.

Seo Sang-young, a researcher at Mirae Asset Securities, explained, "The ongoing issue of economic recession has continuously affected and dampened risk asset preference, which negatively impacted the Korean stock market that is highly dependent on exports. The dollar's strength against other currencies, driven by expectations of continued Fed rate hikes and increased safe-haven demand due to the global economic downturn, also added pressure on foreign capital flows."

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