KOSPI Falls Over 1% Amid Concerns of Austerity and Recession... KOSDAQ Drops Below 700 Level

Foreigners Increase Net Selling in KOSPI and KOSDAQ Markets
"Although Financial Investment Tax Deferred, Caution Advised for Year-End Major Shareholder Requirement Avoidance Volume"

[Asia Economy Reporter Minji Lee] Influenced by the sharp decline in the U.S. stock market, the KOSPI and KOSDAQ indices are also widening their losses in early trading. As fears of a recession resurface amid tightening concerns, investors' sentiment toward risk assets is significantly weakened.

[Image source=Yonhap News]

At 9:30 a.m. on the 23rd, the KOSPI stood at 2,329.02, down 1.18% (27.71 points) from the previous trading day. The KOSPI opened the session at 2,325.86, down 1.31% (30.87 points) from the previous day. Looking at investor trends, foreigners and individuals sold stocks worth 36.3 billion KRW and 60.6 billion KRW respectively, while institutions alone purchased stocks worth 99.4 billion KRW.

Following the poor performance of semiconductor companies including Micron in the previous day’s New York stock market, Samsung Electronics (-1.52%) and SK Hynix (-1.77%) also showed a downward trend. Other companies such as Samsung Biologics (-1.33%), Hyundai Motor (-1.26%), NAVER (-1.9%), Kia (-0.94%), and Celltrion (-1.93%) continued to decline. News that Tesla is offering car discounts in the U.S. and Canada led to even larger drops for secondary battery-related companies: LG Energy Solution (-2.33%), Samsung SDI (-2.83%), and LG Chem (-3.19%).

The KOSPI is analyzed to be continuing its decline as it bears the burden of tightening and concerns over a recession. Ji-hyun Kim, a researcher at Kiwoom Securities, said, “At a time when market attention is shifting from interest rates to corporate profits, Micron’s downward guidance and announcement of workforce reductions have increased concerns about corporate earnings. Since there are no major macro events before the earnings season begins, the market will remain sensitive to economic indicators.”

At the same time, the KOSDAQ index is falling sharply by over 2%, dropping below the 700 mark. The KOSDAQ index stood at 697.93, down 2.39% (17.09 points) from the previous trading day. The index opened at 704.93, down 1.41% (10.09 points) from the previous day, but is widening its losses due to selling pressure from foreigners and institutions. Investor trends show foreigners and institutions sold stocks worth 56.4 billion KRW and 30.8 billion KRW respectively, while individuals alone purchased stocks worth 90.7 billion KRW.

Most of the top market capitalization stocks are showing sharp declines. The leading stock, Celltrion Healthcare, fell 2.11%, while HLB (-4.5%), Kakao Games (-2.7%), Pearl Abyss (-3.59%), Celltrion Pharm (-1.81%), and Studio Dragon (-1.02%) also declined. Secondary battery material companies EcoPro BM dropped 3.95%, and L&F and EcoPro recorded declines of 4.8% and 4.9% respectively.

Meanwhile, there is also analysis that attention should be paid to the large-scale tax avoidance sales by individuals at year-end. Although the introduction of the financial investment income tax (FIIT) was postponed for two years as of the previous day, the major shareholder threshold remains unchanged at 1 billion KRW. Researcher Ji-hyun Kim said, “With no active buying from institutions and foreigners, individual investors who expected the major shareholder threshold to be eased will likely sell stocks before the 28th, when the subjects of capital gains tax are determined.”

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