KOSPI Closes Down 1.60% Following Powell's Remarks... Exchange Rate Surges 6.8 Won

KOSPI Closes Down 1.6%, KOSDAQ Down 0.87%
Indices Reflect Fed's Commitment to Price Stability

[Image source=Yonhap News]

[Asia Economy Reporter Kwangho Lee] Both the KOSPI and KOSDAQ closed lower as disappointing sell-offs emerged following the hawkish (preference for monetary tightening) stance of the U.S. Federal Reserve (Fed). The atmosphere of year-end Santa rally expectations is fading.

On the 15th, the KOSPI index closed at 2360.97, down 38.28 points (1.60%) from the previous trading day.

All of the top 10 market capitalization stocks declined. Naver fell more than 5%, and LG Energy Solution dropped over 2%. Samsung Electronics, Samsung Biologics, SK Hynix, and Celltrion fell more than 1%, while Samsung SDI, LG Chem, and Hyundai Motor also declined slightly.

By sector, the service industry fell more than 3%, and non-metallic minerals and textiles/apparel dropped over 2%. Financials, electrical/electronics, manufacturing, medical precision, chemicals, and construction fell more than 1%, while telecommunications, distribution, and insurance also declined slightly.

Park Sujin, a researcher at Mirae Asset Securities, analyzed, “The Federal Open Market Committee (FOMC)’s decision to raise the benchmark interest rate by 0.5 percentage points and the upward revision of the terminal rate reaffirmed the hawkish stance, causing Asian stock markets to generally weaken. Concerns about economic slowdown due to the downward revision of the U.S. economic growth forecast for next year also negatively affected investor sentiment.”

[Image source=Yonhap News]

The KOSDAQ index closed at 722.68, down 6.32 points (0.87%) from the previous trading day. Foreigners and institutions sold net 10 billion KRW and 38.7 billion KRW respectively, while individuals bought net 49.9 billion KRW.

Similar to the KOSPI, the top 10 market capitalization stocks on the KOSDAQ were all in the red. Kakao Games fell more than 4%, and Pearl Abyss dropped over 3%. EcoPro BM and Studio Dragon declined more than 2%, while Celltrion Healthcare, L&F, and Celltrion Pharm also fell over 1%.

By sector, broadcasting services, other manufacturing, and telecommunications broadcasting services fell more than 2%, while internet, digital content, food and tobacco, entertainment culture, and general electrical electronics declined over 1%. On the other hand, transportation rose more than 1%, and telecommunications equipment and publishing media printing rose slightly.

In the Seoul foreign exchange market that day, the won-dollar exchange rate closed at 1303.1 won, down 6.8 won from the previous trading day.

This decline in the domestic stock market is interpreted as a result of Fed Chair Jerome Powell’s hawkish stance shown in the early hours of the previous day (local time). Powell emphasized, “There will be no rate cuts until we are confident that inflation is under control.”

Lee Kyungmin, a researcher at Daishin Securities, forecasted, “Further rebounds in the global stock markets including the KOSPI will be limited. Rather, whenever the Fed’s intention to raise interest rates strengthens, the global economy will suffer from a double burden of increased uncertainty and weakening momentum for a considerable period.”

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