2730 Surpassed as Institutions Drive Market Up... Financial Investments and Pension Funds All Net Buyers

by Lee Seonae

Published 21 Apr.2022 11:24(KST)

[Image source=Yonhap News]

[Asia Economy Reporter Lee Seon-ae] On the 21st, the domestic stock market started higher and showed a firm upward trend by expanding gains during the morning session. In particular, institutions are leading the market rise by increasing net purchases. Externally, the Federal Reserve (Fed) highlighted strong growth in the U.S. economy through the Beige Book (Economic Report), raising its economic outlook and boosting confidence, which has had a positive impact. Additionally, the increase in demand from U.S. Treasury bond auctions and recent pullbacks following the rise in U.S. Treasury yields, as well as the potential inflow of a won-strengthening trend due to the weak dollar, are creating a favorable environment.

As of 11:17 a.m., the KOSPI is up 0.59% at 2,734.83. After opening at 2,725.71, it expanded its gains, breaking through and maintaining above 2,730. The KOSDAQ started at 930.45 and has remained around the flat level, currently at 930.68.

Institutional demand is supporting the market. Both the KOSPI and KOSDAQ markets are recording net purchases of approximately 354.8 billion KRW and 47.4 billion KRW, respectively. Financial investment, trust funds, and pension funds are all showing net buying, driving the market rise. Conversely, individuals are selling about 413.3 billion KRW and 24.1 billion KRW in the two markets, respectively. Foreigners have a net buying advantage of 59.6 billion KRW in the KOSPI market but a net selling advantage of 12.6 billion KRW in the KOSDAQ market.

The strong sectors in the KOSPI are steel and metal (+1.40%), non-metallic minerals (+1.36%), and construction (+1.30%), while the weak sectors are food and beverages (-0.71%), medical precision instruments (-0.67%), and services (-0.60%). In the KOSDAQ, the strong sectors are metals (+2.03%), construction (+1.91%), and paper and wood (+1.53%), while the weak sectors are food and tobacco (-1.51%), computer services (-1.20%), and digital content (-0.71%).

Seosangyoung, a researcher at Mirae Asset Securities, forecasted, "The Fed Beige Book confidence and the potential inflow of a won-strengthening trend due to the weak dollar suggest that the Korean stock market will show a solid performance." Han Ji-young, a researcher at Kiwoom Securities, predicted, "Despite the Netflix stock plunge, much of it has already been reflected in the previous trading day, and the domestic market will show an upward trend influenced by individual corporate earnings issues and export results up to the 20th."