Despite 'Hawkish Powell', Foreign Investors Turn to Buying... KOSPI Recovers to 2330, Narrowing Losses

LG Energy Solution up 3% and other secondary battery stocks rise together
Secondary battery-related stocks all showing upward trend

On the 3rd, as the U.S. Federal Reserve (Fed) took a more hawkish stance than the market expected, the domestic stock market also started lower. This is a view of the Hana Bank dealing room in Jung-gu, Seoul. On that day, the KOSPI opened at 2297.45, down 39.42 points (1.69%) from the previous trading day, and the won-dollar exchange rate started at 1425.3 won, up 7.9 won. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Ji Yeon-jin] Due to the impact of the US interest rate hike, the domestic stock market, which started lower on the 3rd, significantly reduced its losses in the afternoon. This was thanks to foreign investors switching to buying during the session while institutions were the sole sellers.

The KOSPI index was trading at 2,332.10, down 4.77 points (0.20%) from the previous day as of 1:50 PM. The index opened sharply lower at 2,297.45, down 1.69%, but recovered above the 2,300 level during the session and reversed the early losses.

Institutions sold a net amount worth 484.2 billion KRW, pulling the index down, but individuals bought a net 433.6 billion KRW, and foreign investors switched to net buying of 30.3 billion KRW during the session. Han Ji-young, a researcher at Kiwoom Securities, explained, "The undervaluation of the domestic stock market and policy uncertainties in China create favorable conditions for foreign investor demand," adding, "Relatively better earnings compared to the US stock market support the index's downside."

Market sentiment also improved compared to the morning. The number of advancing stocks in the KOSPI market increased to 418 from earlier in the session, while declining stocks numbered 757. LG Energy Solution showed a strong gain of over 3%, and Samsung SDI and LG Chem also recorded nearly 2% increases. POSCO Chemical surged more than 6%.

On the other hand, NAVER fell about 3%, and Kakao dropped over 4%. Samsung Electronics, which had fallen more than 2% in the early session, narrowed its losses and showed a slightly weak trend, while SK Hynix was down 1.7%. Hyundai Motor and Kia showed declines of over 2%. Korea Zinc, which plunged more than 8% from the start of trading due to poor earnings, reduced its losses to the 4% range. Doosan Enerbility recorded a rise of over 4% thanks to strong earnings.

At the same time, the KOSDAQ index was at 693.67, down 3.70 points (0.53%). The KOSDAQ also started down 11.95 points (1.71%) but quickly reduced its losses during the session. Institutions sold about 83.5 billion KRW, foreign investors switched to net buying of 14.8 billion KRW during the session, and individuals bought a net 74.6 billion KRW.

Among the top market cap stocks in KOSDAQ, only secondary battery material stocks showed gains. Ecopro was up more than 3%, and Ecopro BM rose 1.37%. While L&F showed a slightly weak trend, Chunbo was up 2.70%.

However, game stocks were weak, with Kakao Games down nearly 5% and Pearl Abyss falling 3.91%. Celltrion Healthcare, HLB, and Celltrion Pharm recorded declines of around 2%.

In the early hours of the day, the US Federal Reserve (Fed) raised the benchmark interest rate by 75 basis points again, following the increase in September. This was the fourth consecutive giant step taken this year to curb the burden of high inflation. Fed Chair Powell said there is room to slow the pace of future hikes but noted that the final rate level could be higher than previously expected.

Seo Sang-young, a researcher at Mirae Asset Securities, explained, "Considering that the US stock market saw a weaker dollar and lower Treasury yields immediately after the FOMC and that the decline was centered on large tech stocks, the decline in the Korean stock market is limited."

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