KOSPI Steady Around '2140 Level', Market Unfazed by North Korean Provocations

Published 17 Jun.2020 10:56(KST)

[Image source=Yonhap News]

[Asia Economy Reporters Jihwan Park and Sehee Jang] The KOSPI showed a flat trend on the 17th. Despite North Korea blowing up the inter-Korean joint liaison office building located in the Kaesong Industrial Complex the day before, the domestic stock market did not react significantly.

As of 10:08 a.m. that day, the KOSPI recorded 2142.59, up 0.28% (5.98 points) from the previous day. The index opened at 2133.18, down 0.23% (4.87 points) from the previous day, and fluctuated within a flat range. Individuals were net buyers with 123.6 billion KRW, while foreigners and institutions were net sellers with 63.3 billion KRW and 72.6 billion KRW, respectively. At the same time, the KOSDAQ index rose 0.61% (4.50 points) to 739.89.

Since North Korea’s provocation was already anticipated, its impact on the stock market is considered limited. So-yeon Park, a researcher at Korea Investment & Securities, said, "The biggest topics in the current financial market are the COVID-19 pandemic and the strength of stimulus measures responding to it, as well as the future economic trajectory. The North Korea issue itself will not become a major topic."

In the Seoul foreign exchange market that day, the won-dollar exchange rate started at 1212.0 won, up 4.8 won, and as of 10:17 a.m., it rose to 1213.25 won. The North Korean risk stimulated risk-averse sentiment, slightly raising the won-dollar exchange rate, which had fallen to the 1200 won level the day before. However, the rise in key economic indicators such as U.S. May retail sales somewhat reduced the extent of the exchange rate increase.