Foreigners and institutions scoop up KOSPI dropped by individuals... Approaching 2290 level 'Recovery'

[Image source=Yonhap News]

[Asia Economy Reporter Lee Seon-ae] On the 27th, the KOSPI, which started higher, showed strong momentum by expanding its gains into the afternoon, supported by combined buying from foreigners and institutions. It is demonstrating resilience, approaching the 2890 level. While only individuals are selling, all of that volume is being absorbed by foreigners and institutions. The won-dollar exchange rate fell compared to the previous trading day, encouraging foreigners to increase their purchases.

As of 2:03 PM on the same day, the KOSPI was trading at 2286.28, up 1.64% from the previous trading day. The KOSDAQ was at 693.70, up 1.54%. The end of the rally in the U.S. stock market has had little impact on domestic investor sentiment. Rather, the easing concerns over Federal Reserve (Fed) tightening have been perceived as a positive factor, reducing pressure and strengthening the upward trend.

In the KOSPI market, while individuals are selling 712.6 billion KRW, foreigners and institutions are buying 257.4 billion KRW and 455.8 billion KRW respectively. In the KOSDAQ market, individuals are selling 108.6 billion KRW, while foreigners and institutions are net buyers with 76.9 billion KRW and 29.5 billion KRW respectively. Notably, foreigners are also net buyers in the futures market, with about 576.9 billion KRW in net purchases at this time.

Although the earnings disappointments of major U.S. tech companies dragged down the three major U.S. stock indices, the impact on the domestic stock market appears limited.

On the 26th (local time), the Dow Jones Industrial Average closed at 31,839.11, up 2.37 points (0.01%) from the previous session. The Dow rose more than 300 points during the session but gave back most of the gains to close near flat. The Standard & Poor’s (S&P) 500 index closed down 28.51 points (0.74%) at 3,830.60, and the tech-heavy Nasdaq index plunged 228.12 points (2.04%) to 10,970.99.

The Q3 earnings issues of U.S. companies had already been priced into the stocks, and recent indicators suggesting an economic slowdown, along with interventions by central banks worldwide, have calmed the dollar’s strength.

Seosangyoung, a researcher at Mirae Asset Securities, said, "Since much of this was already reflected yesterday, the impact was not significant," adding, "The weakening of the dollar has helped strengthen the won, positively influencing foreign demand."

Lee Kyung-min, a researcher at Daishin Securities, said, "The KOSPI is rising on combined net buying by foreigners and institutions," and "Despite negative news related to U.S. big tech earnings, expectations for a slowdown in interest rate hikes have positively affected investor sentiment."

The inversion phenomenon, where the 3-month U.S. Treasury yield is higher than the 10-year yield, has increased recession concerns, which in turn has fueled expectations that the Fed will slow the pace of rate hikes, a positive factor.

Most of the top market capitalization stocks in the KOSPI are rising. In particular, the market leader Samsung Electronics recovered to 60,000 KRW intraday for the first time in two months following news of Vice Chairman Lee Jae-yong’s promotion to chairman. Samsung C&T is also showing a nearly 5% rise after a Q3 earnings surprise. On the other hand, SK Hynix is down more than 3%, likely affected by forecasts of a Q4 loss due to weakening semiconductor demand. All of the top 10 market capitalization stocks in the KOSDAQ have turned positive after a long time. Celltrion Healthcare and Celltrion Pharm are up over 1% on expectations of strong Q3 earnings, and second battery stocks such as EcoPro BM and L&F are also showing high gains.

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