Growing Caution Ahead of US Employment Report Release... KOSDAQ Falls Below 700 Again

KOSPI Attempts Intraday Rebound but Turns Slightly Lower in Afternoon
"Federal Reserve Tightening Intensity Will Vary Based on US Wage Growth Rate"

[Image source=Yonhap News]

[Asia Economy Reporter Ji Yeon-jin] On the 7th, the domestic stock market continued to show a slightly weak trend amid caution ahead of the U.S. employment report release later that night. Despite the sluggish performance of Samsung Electronics and Korea's twin deficits, foreign selling pressure eased, leading the KOSPI index to attempt an intraday rebound. However, the sentiment that indicators predicting the Federal Reserve's potential 'pivot' (monetary policy shift) need to be confirmed is limiting the index's upside.

As of 2:02 p.m., the KOSPI index was trading at 2,231.93, down 5.93 points (0.26%) from the previous day. Individual net buying decreased slightly to 119.4 billion KRW compared to the morning, and foreign net selling also shrank to 32.4 billion KRW. Institutions sold about 90.5 billion KRW.

The index started the day with a drop of over 1%, influenced by the decline in the U.S. stock market the previous day. Samsung Electronics, which announced its earnings before the market opened, reported a more than 30% decrease in third-quarter operating profit. Additionally, with the trade deficit continuing for six consecutive months and Korea's current account turning to a deficit of 3.05 billion USD last month, combined selling by foreigners and institutions was intensified.

However, concerns over Samsung Electronics' earnings had already been priced in by the market, leading to buying interest in semiconductor stocks such as Samsung Electronics and SK Hynix. Moreover, the market is dominated by a wait-and-see stance ahead of the U.S. employment report release that night.

Kim Yumi, a researcher at Kiwoom Securities, explained, "Market participants need to check the employment report results, as if this report triggers tightening, the dollar could become a burden. This is because the sustained wage growth in the U.S. could increase concerns about the Fed's tightening intensity."

Among the top market capitalization stocks in KOSPI, Samsung Electronics and SK Hynix maintained a firm tone, while LG Energy Solution, Samsung Biologics, and LG Chem also showed slight gains. However, Hyundai Motor and Kia each fell more than 1%, and NAVER and Kakao are extending their losses.

The KOSDAQ index deepened its losses in the afternoon, breaking below the 700 level again after just one day. The index was down 7.76 points (1.10%) from the previous day, at 698.25. Individuals bought about 200.4 billion KRW worth, while foreigners and institutions sold net amounts of 139.7 billion KRW and 62 billion KRW, respectively.

EcoPro BM and L&F showed firm gains, while Kakao Games plunged more than 5%. Celltrion Healthcare, HLB, EcoPro, Pearl Abyss, and Celltrion Pharm are also declining.

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