Foreigners and Institutions Lift KOSPI and KOSDAQ... Individuals Seize Rebound Opportunity to Sell 1 Trillion Won

[Image source=Yonhap News]

[Asia Economy Reporter Lee Seon-ae] The KOSPI, which rebounded within a day to recover the 2200 level, closed on the 2210 line on the 14th. The KOSPI rose more than 2%, and the KOSDAQ rose more than 4%. Supported by favorable conditions in the U.S. stock market, net purchases by foreigners and institutions contributed to the index's rise. Only individual investors, gripped by fear amid widespread volatility concerns, sold off their holdings.

On that day, the KOSPI closed at 2212.55, up 49.68 points (2.30%) from the previous trading day. The index opened at 2200.66, up 37.79 points (1.75%). The KOSDAQ closed at 678.24, up 26.65 points (4.09%) from the previous day, having started at 665.17, up 13.58 points (2.08%).

The main drivers of the index rise were foreigners and institutions. Foreigners and institutions purchased 265 billion KRW and 364.1 billion KRW respectively in the KOSPI market. In the KOSDAQ market, they also net bought 184.7 billion KRW and 145 billion KRW respectively. Park Gwang-nam, a researcher at Mirae Asset Securities, said, "Both KOSPI and KOSDAQ rebounded due to the digestion of the U.S. Consumer Price Index (CPI) and the possibility of the UK withdrawing its tax cut plan," adding, "The pound strengthened, the won-dollar exchange rate fell, and net buying by foreigners and institutions expanded."

On the other hand, only individual investors net sold. Individuals sold about 623.2 billion KRW and 338.8 billion KRW in the two markets respectively. This was driven by fear of volatility risks. Lee Kyung-min, a researcher at Daishin Securities, said, "Since the previous day’s option expiration caused a large drop, the market rebounded sharply today, but in the long term, this is only a short-term relief," adding, "We need to be cautious of the possibility of further declines due to fundamental variables such as economic recession and earnings deterioration." Seo Sang-young, a researcher at Mirae Asset Securities, also warned about volatility, saying, "The fact that the recession period is approaching rapidly is a burden."

Among the top market capitalization stocks in the KOSPI, tech stocks such as Naver and Kakao rebounded significantly. Naver rose more than 4% from the previous day, closing at 165,500 KRW, and Kakao surged over 8%. This is attributed to the recovery of risk appetite following the rise of the Nasdaq index despite the U.S. CPI announcement. All sectors in the KOSPI rose together, with medical precision (6.95%), construction (4.79%), and services (4.12%) showing gains over 4%, while machinery (3.93%), textiles and apparel (2.93%), and finance (2.88%) also recorded increases.

Among the top market capitalization stocks in the KOSDAQ, Kakao Games’ stock price surged over 9%. The news of the withdrawal of the listing of Lionheart Studio, a subsidiary of Kakao Games, positively influenced the resolution of controversies over the listing of key subsidiaries. Shinilgen, which resumed trading after 2 years and 5 months, surged on the second day of trading resumption. Shinilgen’s stock closed at 14,100 KRW, up 3,250 KRW (29.95%) from the previous day. As a result, the stock price surpassed the closing price of 12,100 KRW at the time of trading suspension on May 4, 2020. Additionally, Celltrion Healthcare rose more than 3%, reclaiming the top spot in market capitalization. KOSDAQ sectors rose broadly. Digital content rose by over 7%, and other services and entertainment/culture closed with gains in the 6% range.

Meanwhile, in the Seoul foreign exchange market, the won-dollar exchange rate closed at 1,428.5 KRW, down 2.8 KRW from the previous trading day.

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