Geopolitical Risks Lead KOSPI to Close Below 2470... Institutions 'Sell Off'

[Image source=Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] The KOSPI index closed lower on the 16th as institutional investors showed a net selling trend.

On that day, the KOSPI index fell 2.88 points (0.12%) to close at 2477.45, marking a decline after one trading day. The index opened at 2487.00, up 6.67 points (0.27%), but turned downward as foreigners and institutions sold. It dropped to as low as 2446.79 during the session but narrowed the losses as foreigners returned to net buying. Individuals and foreigners purchased stocks worth approximately 174.3 billion KRW and 41 billion KRW respectively, while institutions sold about 209.1 billion KRW net. Individuals and institutions showed net buying and net selling for three consecutive trading days, respectively.

Among the top market capitalization stocks, Samsung Biologics fell the most, down 2.87%. This was followed by Hyundai Motor (-1.43%), Naver (NAVER) (-1.30%), Kia (-1.02%), LG Chem (-0.42%), Kakao (-0.17%), and SK Hynix (-0.11%). Celltrion dropped more than 4%. On the other hand, LG Energy Solution, Samsung SDI, and Samsung Electronics rose by 0.67%, 0.56%, and 0.48%, respectively.

By sector, non-metallic minerals (-2.93%), pharmaceuticals (-2.91%), transportation and warehousing (-1.47%), medical precision (-1.45%), telecommunications (-0.86%), transportation equipment (-0.59%), and textiles and apparel (-0.48%) declined. Meanwhile, electric and gas utilities (1.24%), food and beverage (0.76%), machinery (0.76%), and distribution (0.73%) showed strength.

On the 15th (local time), the U.S. stock market closed higher as the October Producer Price Index (PPI) rose only 0.2% month-over-month, lower than market expectations, raising hopes for easing inflation. The Dow Jones Industrial Average rose 0.17%, the large-cap focused S&P 500 increased 0.87%, and the tech-heavy Nasdaq rose 1.45%.

However, the domestic market was affected by news that a missile, presumed to be launched by Russia, fell in Poland. Nevertheless, U.S. President Joe Biden expressed caution about concluding that Russia launched the missile, stating, "Based on the trajectory, it does not seem likely that it was launched from Russia." It was also reported that the missile that fell in Poland is presumed to be an interception missile fired by the Ukrainian military.

Kim Seok-hwan, a researcher at Mirae Asset Securities, said, "Volatility caused by geopolitical risks stemming from Russia and Ukraine was reflected in Asian markets as well," adding, "Safe-haven demand strengthened, leading to a stronger dollar and increased foreign selling."

Lee Kyung-min, a researcher at Daishin Securities, explained, "Due to the expansion of geopolitical risks, the KOSPI fell more than 1% along with U.S. after-hours futures," but added, "However, as the party responsible for the missile launch has not been identified, some related concerns have eased, and the KOSPI narrowed its losses."

On that day, the USD/KRW exchange rate closed at 1325.0 KRW, up 7.4 KRW from the previous day's closing price.

The KOSDAQ index also closed lower, falling 1.86 points (0.25%) to 743.10 compared to the previous trading day. The KOSDAQ opened at 746.55, up 1.59 points (0.21%), but turned downward due to geopolitical concerns. The index dropped to 737.87 and then fluctuated before closing in a downtrend. Individuals and institutions were net buyers of approximately 196.4 billion KRW and 100 million KRW, respectively, while foreigners sold about 154.7 billion KRW.

Among the top market capitalization stocks, Ecopro BM (-3.52%), HLB (-2.96%), Celltrion Healthcare (-2.78%), Celltrion Pharm (-2.77%), and Ecopro (-2.26%) declined. Meanwhile, L&F (1.95%), Pearl Abyss (1.14%), L&F (0.48%), Kakao Games (0.34%), and Chunbo (0.15%) rose.

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