KOSPI Barely Holds at 2400... Volatility Warning Amid Foreigners' Net Selling of Futures

[Image source=Yonhap News]

[Asia Economy Reporter Lee Seon-ae] On the 10th, the KOSPI index started lower, barely holding the 2400 level. This marked the end of a four-day rally. The overnight sharp decline in the U.S. stock market is interpreted as a cooling of investor sentiment. Additionally, Binance's announcement to withdraw from acquiring FTX increased volatility in the cryptocurrency market, adding to the pressure.

On the day, the KOSPI opened down 18.64 points at 2405.77 (0.77%↓), marking a reversal after five consecutive days of gains. As of 9:20 a.m., it was trading at 2417.35.

The New York stock market closed sharply lower after a 'three-day rally' overnight. Uncertainty over the midterm election results and signs of collapse in the cryptocurrency market strengthened risk-averse sentiment, causing a significant retreat. On the 9th (local time), the Dow Jones Industrial Average closed at 32,513.94, down 646.89 points (1.95%) from the previous session. The Standard & Poor's (S&P) 500 index dropped 79.54 points (2.08%) to 3,748.57, and the tech-heavy Nasdaq index fell 263.02 points (2.48%) to 10,353.17.

Seo Sang-young, a researcher at Mirae Asset Securities, said, "The U.S. stock market's decline due to the Republican Party's narrow victory in the midterm elections, which led to a stronger dollar, and volatility in the cryptocurrency market is weighing on the domestic market." He added, "In particular, the strong dollar is causing continued weakness in the semiconductor sector along with tech stocks, which is expected to negatively impact related stocks." He further noted, "Considering it is an options expiration day, there will be significant changes depending on foreign investors' futures trends." In the early session, foreign investors are showing a net selling bias in the futures market.

Han Ji-young, a researcher at Kiwoom Securities, forecasted, "Despite favorable foreign demand conditions, the domestic market is expected to show a weak trend influenced by the U.S. midterm election uncertainties, adjustments in major sectors such as U.S. semiconductors, big tech, and energy, and caution over the October U.S. Consumer Price Index (CPI) (consensus 7.9%)."

At this time, supply and demand conditions are also unfavorable. Foreign investors have a net selling bias of about 16.7 billion KRW in the KOSPI and about 10.9 billion KRW in the KOSDAQ markets from the start of trading. Only institutions show a net buying bias of 40.5 billion KRW in the KOSPI market. In the KOSDAQ market, institutions are recording net sales of about 16 billion KRW. Individual investors show a net selling bias of 18.2 billion KRW in the KOSPI market and a net buying bias of 29.1 billion KRW in the KOSDAQ market.

By sector, most KOSPI industries are declining. Steel & metals, chemicals, services, and transportation equipment are down by around 1%. Construction, securities, electrical & electronics, manufacturing, machinery, paper & wood, non-metallic minerals, distribution, electricity & gas, medical precision, finance, transportation & warehousing, insurance, telecommunications, and food & beverage sectors are down less than 1%. Pharmaceuticals and textiles & apparel are up less than 1%.

Top market capitalization stocks are also mostly down. Kakao is down over 2%, while Samsung Electronics, Samsung SDI, Samsung Electronics Preferred, Hyundai Motor, NAVER, and Kia are down around 1%.

Meanwhile, the KOSDAQ opened down 6.11 points at 708.49 (0.86%↓). All sectors in the KOSDAQ are weak. Digital content is down over 2%, and telecommunications equipment, entertainment culture, semiconductors, other manufacturing, non-metallic minerals, other services, broadcasting services, telecommunications services, non-metallic minerals, and transportation equipment parts are down around 1%. Top market capitalization stocks are also mostly down. Pearl Abyss is down over 4%, and Wemade is down over 3%.

The won-dollar exchange rate started at 1,370.5 won, up 5.7 won.

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