KOSPI Closes Higher... Foreigners Net Buyers of Semiconductors

[Image source=Yonhap News]

[Asia Economy Reporter Junho Hwang] On the 26th, the KOSPI closed higher as foreign investors continued net buying, with funds flowing into semiconductors and secondary batteries.

On that day, the KOSPI closed at 2,249.56, up 14.49 points (0.65%). Foreigners engaged in net buying worth 612.9 billion KRW, sustaining the upward momentum of the index. In contrast, individuals and institutions net sold stocks worth 495.8 billion KRW and 119.3 billion KRW, respectively.

Although the index showed an upward trend, fewer than 300 stocks out of the total advanced. Among the top market capitalization stocks, funds concentrated on representative semiconductor and secondary battery stocks. Samsung Electronics closed at 59,400 KRW, up 2.95% from the previous day. Foreigners have been net buyers for five consecutive trading days, expanding the gains. LG Energy Solution also rose 3.52%. Samsung SDI (3.36%) and LG Chem (1.81%) also increased compared to the previous day.

On the other hand, Hyundai Motor, Kia, and NAVER showed a downward trend. The previous day, Hyundai Motor announced third-quarter results for this year that fell short of expectations. On a consolidated basis, sales increased 31% year-on-year to 37.7054 trillion KRW, while operating profit decreased 3% to 1.5518 trillion KRW. The market expectation was around 2.8465 trillion KRW. Securities firms forecasted that Hyundai Motor and Kia's performance next year would be sluggish.

Kim Pyeongmo, a researcher at DB Financial Investment, said, "In the case of Hyundai Motor, it is expected that market share in major regions will inevitably decline in 2023 due to a decrease in new car launches." Following this, Lee Sanghyun, a researcher at IBK Investment & Securities, analyzed, "Like Hyundai Motor, Kia's recent stock price adjustment is due to concerns over reduced electric vehicle sales in the U.S. caused by the Inflation Reduction Act (IRA), potential periodic provisioning burdens after the lifetime warranty on Theta 2 engines, and increased uncertainty such as possible withdrawal from the Russian market."

Looking at sectors, the electric and electronics sector (2.39%) and manufacturing (1.22%) stood out with gains. In the electric and electronics sector, Hyundai Electric (5.75%), LS ELECTRIC (3.53%), and Samsung Electro-Mechanics (1.24%) surged. In manufacturing, Hyundai Doosan Infracore rose 10.62%, likely influenced by a 122% increase in operating profit for the third quarter this year, reaching 74.7 billion KRW.

Unlike the KOSPI, the KOSDAQ recorded 683.17, down 0.82% from the previous day. Although individuals net bought 81.3 billion KRW, foreigners and institutions net sold 59.1 billion KRW and 26.3 billion KRW, respectively, which had a significant impact. Among the top market capitalization stocks, L&F and Kakao Games showed gains in the 1% range.

Lee Kyungmin, a researcher at Daishin Securities, analyzed, "Some big tech companies such as Microsoft and Alphabet saw their after-hours futures in the U.S. fall nearly 2%, leading domestic internet stocks to decline together, but the overall impact on the stock market was limited." He added, "Rather, despite SK Hynix recording an earnings shock, semiconductor stocks led by foreigners' net buying drove the market's rise."

On that day, the won-dollar exchange rate recorded 1,426.60 KRW, down 0.45%. Seo Sangyoung, a researcher at Mirae Asset Securities, explained, "At 2 p.m. (Korean time), the People's Bank of China sold dollars both inside and outside the mainland, expanding the yuan's strength." He added, "A volume presumed to be a small-scale intervention by the Bank of Japan was released, strengthening the yen, which in turn strengthened the euro and weakened the dollar."

As of that morning, the 3-year government bond yield rose 0.02 percentage points from the previous day to 4.241%. Meanwhile, the 5-year yield fell 0.003 percentage points to 4.380%.

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