US Interest Rate Cut Expectations Weaken... KOSPI Falls Below 2600 Amid Institutional Selling

The KOSPI fell for the second consecutive day due to a selling spree by institutional investors, dropping to the 2580 level. This is interpreted as a deterioration in investor sentiment following the release of the Federal Open Market Committee (FOMC) minutes, which dampened expectations for an interest rate cut.

On the 2nd, the KOSPI index closed at 2669.81, up 14.53 points (0.55%) from the previous trading day. Dealers are working in the dealing room at the Hana Bank headquarters in Jung-gu, Seoul. On the same day, the won-dollar exchange rate closed at 1300.4 won, up 12.4 won from the previous trading day. Photo by Jinhyung Kang aymsdream@

On the 4th, the KOSPI closed at 2857.02, down 20.29 points (0.78%) from the previous day. The index started the day at 2592.55, down 14.87 points (0.57%) from the previous close, and then widened its losses.

The weak U.S. stock market and uncertainty over the timing of U.S. interest rate cuts appear to be dragging down the market. On the 3rd (local time), the New York stock market closed lower across the board as expectations grew that the pace of rate cuts would not be as rapid as the market had hoped.

At the New York Stock Exchange (NYSE) that day, the blue-chip Dow Jones Industrial Average closed at 37,430.19, down 284.85 points (0.76%) from the previous session. The large-cap S&P 500 index closed at 4,704.81, down 38.02 points (0.8%), while the tech-heavy Nasdaq index ended at 14,592.21, down 173.73 points (1.18%).

Lee Kyung-min, a researcher at Daishin Securities, explained, "With the release of the December FOMC minutes, the previously excessive market expectations for rate cuts retreated, leading to a deterioration in investor sentiment. Additionally, as was the case yesterday, there was a supply-side aftershock mainly from institutional investors."

The index was pulled down by institutions. On that day, institutions net sold 800 billion KRW worth of stocks, maintaining their selling stance for the second consecutive day. Individuals and foreigners net bought 670 billion KRW and 115 billion KRW worth of stocks, respectively.

Among the top market capitalization stocks, Celltrion (-5.83%), Samsung Biologics (-2.16%), and Hyundai Motor (-1.96%) declined, and Samsung Electronics, which was close to 80,000 KRW, also fell 0.52% from the previous day to 76,600 KRW.

On the other hand, Kakao (1.06%), LG Energy Solution (0.72%), and Naver (0.45%) closed higher.

By sector, pharmaceuticals (-3.69%), finance (-1.59%), and medical precision (-1.56%) declined, but some sectors such as transportation and warehousing (1.31%) and food and beverages (0.25%) closed higher.

The KOSDAQ index closed at 866.25, down 5.32 points (0.61%) from the previous session.

In the KOSDAQ market, individuals were the sole net buyers with purchases worth 213.5 billion KRW, while foreigners and institutions sold 132.1 billion KRW and 72.9 billion KRW worth of stocks, respectively.

Among the top market capitalization stocks, L&F (8.96%), LS Materials (5.58%), and EcoPro BM (2.76%) rose, while HLB (-12.38%), Celltrion Pharm (-5.27%), and Alteogen (-2.21%) closed lower.

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