[MarketING] KOSPI Slips to 2580 Level Amid Continuous Foreign Selling

KOSPI Falls Below 2600 for Third Consecutive Day
KOSDAQ Also Weak for Second Day... Drops Below 880

The KOSPI fell for the third consecutive day, dropping to the 2580 level. The KOSDAQ also continued its decline for the second day in a row, falling below the 880 level. Foreign investors have been selling continuously, pulling the indices down.

KOSPI breaks below 2600 and KOSDAQ below 880

On the 21st, the KOSPI closed at 2582.63, down 22.28 points (0.86%) from the previous day. The KOSDAQ ended the session at 875.70, down 10.71 points (1.21%). The KOSPI slipped to the 2580 level, falling below 2600 for the first time in about 20 days since the 1st, based on closing prices.

[Image source=Yonhap News]

Foreign and institutional investors have been leading the downward trend with continuous selling. Foreign investors have maintained a selling bias this week. On this day, they sold a net 405.2 billion KRW in the KOSPI market and 186.7 billion KRW in the KOSDAQ market, continuing their selling streak for three consecutive days in both markets. Institutions sold 208 billion KRW and 80.7 billion KRW respectively. Institutions have maintained a selling bias for six consecutive days in the KOSPI market and three consecutive days in the KOSDAQ market. On the other hand, individual investors bought net 624.5 billion KRW and 282 billion KRW in the two markets respectively.

Kim Seok-hwan, a researcher at Mirae Asset Securities, analyzed, "Recently, concerns over economic slowdown from China and caution over remarks by Federal Reserve (Fed) officials have expanded the preference for safe assets, causing the won-dollar exchange rate to rise by more than 12 won during the session, and both KOSPI and KOSDAQ declined." He added, "In the late session, the foreign selling intensified, widening the index's decline." On this day, the won-dollar exchange rate in the Seoul foreign exchange market closed at 1292.0 won, up 11.7 won from the previous day.

With a growing supply-demand gap, the indices continue to show weak performance. Choi Yoo-jun, a researcher at Shinhan Investment Corp., said, "The index flow slowed as tightening measures were recognized," adding, "Expectations for China's recovery have lowered, and the supply-demand gap is also significant."

Automobile stocks alone 'zoom' amid weakness in top market cap stocks

While most of the top market capitalization stocks declined, automobile stocks showed strength. Expansion in the Vietnamese market and increased exports acted as drivers for the stock price rise.

On this day, Hyundai Motor closed at 204,000 KRW, up 3.08% from the previous day, marking a rebound after five days. Kia rose 2.69%.

Researcher Kim analyzed, "The expansion of Hyundai Motor and Kia's entry into Vietnam and the significant increase in automobile export value in the export-import trends up to the 20th of this month reflected expectations for improved earnings."

According to the 'Export-Import Status from June 1 to 20' announced by the Korea Customs Service on this day, passenger car exports increased by 110% compared to the same period last year.

Strong sales in Vietnam also had a positive impact. According to Hyundai Motor Group, Hyundai Motor sold a total of 22,903 units in the Vietnamese market from the beginning of this year to May, surpassing Toyota's 21,547 units to rank first in cumulative sales. Kia also sold 13,951 units.

The upward revision of electric vehicle sales targets announced the previous day also seems to have been reflected. At the '2023 CEO Investor Day,' Hyundai Motor set a global electric vehicle sales target of 2 million units by 2030. The plan is to sell 330,000 units this year, 940,000 units in 2026, and 2 million units in 2030 in the global market. Compared to last year's targets, the 2026 goal was raised by 100,000 units and the 2030 goal by 130,000 units. Along with this, a large-scale investment plan of 11 trillion KRW annually over the next 10 years was also announced.

Lee Sang-hyun, a researcher at IBK Investment & Securities, said, "Raising electrification targets and specifying strategies is positive," adding, "The point when the stock price reflects accelerating electrification while leveraging legacy strengths is approaching."

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