Due to the Impact of US Giant Step, KOSPI Retreats to 2310 Level... Samsung Electronics and SK Hynix Hit New Lows

On the 22nd, when the won-dollar exchange rate surpassed 1,400 won for the first time in 13 years and 6 months, dealers were working in the dealing room of Hana Bank in Euljiro, Seoul. Photo by Mo Honam munonam@

[Asia Economy Reporter Myunghwan Lee] The KOSPI index extended its losses in the morning session on the 22nd, sliding to the low 2310 range. This appears to be influenced by the U.S. Federal Reserve's (Fed) third consecutive giant step (a 0.75 percentage point hike in the benchmark interest rate at once) and the impact of a high exchange rate. Large semiconductor stocks such as Samsung Electronics recorded new 52-week lows in the KOSPI market.

As of 10:58 a.m. on the day, the KOSPI stood at 2312.72, down 1.47% (34.49 points) from the previous trading day. The KOSPI opened at 2319.70, down 1.17% (27.51 points), and has slightly deepened its decline since then.

In the KOSPI market, individual investors were net buyers of 258.6 billion KRW alone, while institutions and foreigners sold stocks worth 198.8 billion KRW and 80.8 billion KRW, respectively.

Samsung Electronics traded at 54,400 KRW, down 1.63% (900 KRW) from the previous day, marking a new 52-week low for the second consecutive day. SK Hynix also fell 2.05% (2,500 KRW) to 86,200 KRW, similarly hitting a new 52-week low. Large internet stocks such as Naver (-3.99%) and Kakao (-4.38%) also showed significant declines. Among other top market cap stocks in the KOSPI market, only Samsung SDI (0.16%) showed a slight increase amid the overall downtrend.

By sector, indices for food and beverages (1.65%) and electric and gas utilities (1.02%) rose. The food and beverage sector appears to be gaining attention as a defensive sector amid increased market volatility. Conversely, securities (-2.97%), services (-2.93%), and construction (-2.87%) sectors experienced significant declines.

At the same time, the KOSDAQ index stood at 737.40, down 2.32% (17.49 points) from the previous trading day. The KOSDAQ opened at 746.82, down 1.07% (8.07 points), but the decline widened to over 2% during the morning session.

In the KOSDAQ market, foreign and institutional investors were net sellers of stocks worth 99 billion KRW and 14.8 billion KRW, respectively. Individual investors were net buyers of 107.3 billion KRW alone.

Most of the top market cap stocks in the KOSDAQ were also declining. The gaming and entertainment sectors showed notable drops with JYP Ent. (-5.45%), Kakao Games (-4.80%), and Pearl Abyss (-2.50%). On the other hand, EcoPro (2.56%) and EcoPro BM (0.10%) were rising.

Among KOSDAQ sectors, only the food, beverage, and tobacco index (4.41%) was rising. Broadcasting services (-4.95%), telecommunications and broadcasting services (-4.05%), and digital content (-3.67%) sectors were declining.

[Image source=Yonhap News]

The decline in the domestic stock market on the day appears to be influenced by the Fed's decision to implement a third consecutive giant step. On the 21st (local time), the Fed held its Federal Open Market Committee (FOMC) regular meeting and announced a 0.75 percentage point increase in the benchmark interest rate. As inflation remains stubbornly high, the Fed took the unusual step of three consecutive giant steps. At the same time, the U.S. benchmark interest rate once again surpassed Korea's, causing a reoccurrence of the interest rate inversion phenomenon.

The strong dollar trend also seems to be a burden on the domestic stock market. As of 11 a.m. on the day, the won-dollar exchange rate in the Seoul foreign exchange market stood at 1,408.20 KRW. The won-dollar exchange rate reaching the 1,400 KRW level is the first time in about 13 years and 6 months since March 31, 2009, during the financial crisis.

Given the expected increase in market volatility, selective investment in sectors and stocks is advised. Ji-young Han, a researcher at Kiwoom Securities, said, "From a sector perspective, it is necessary to continuously focus on sectors or stock groups with high earnings visibility." She suggested, "These sectors include automobiles and IT, which benefit from exchange rate effects and supply shortages, as well as defense sectors benefiting from the possibility of Russia's escalation and Taiwan issues."

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