KOSPI and KOSDAQ Face Growing Supply-Demand Instability, Fall Over 1%

The KOSPI ended the session down over 1% amid concerns over exchange rate volatility and supply-demand instability. The KOSDAQ index fell more than 1.9%.

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On the 25th, the KOSPI closed at 2489.02, down 1.37% (34.48 points) from the previous trading day. The KOSPI started the day up about 0.3% compared to the previous day but fluctuated between gains and losses, falling nearly 2% intraday. However, in the afternoon, some of the factors that had dragged the index down were partially resolved, leading to a close with a decline in the 1% range.

On this day, the market showed a sharp decline due to increased selling pressure from foreign investors and concerns over supply-demand instability. According to investment trends, foreign investors sold futures worth 766.1 billion KRW. In the cash market, they continued to sell throughout the session but switched to net buying near the close, purchasing stocks worth 7.3 billion KRW. Conversely, institutions, which had shown net buying during the session, recorded a net sale of 300 million KRW alone. The Chinese stock market’s sharp decline, mainly in tech stocks after opening, increased exchange rate volatility, negatively affecting investor sentiment.

Continuing from the previous day, some stocks hit the lower price limit due to supply-demand pressures, adding to the burden. Samchully (-29.99%), Daesung Holdings (-29.97%), Seoul Gas (-29.92%), Sebang (-29.85%), Dow Data (-30%), and Seongwang (-29.98%) all hit the lower limit, while Harim Holdings (-14%) and Daol Investment & Securities (-9.78%) also continued to decline.

Kim Seok-hwan, a researcher at Mirae Asset Securities, explained, “Stocks that had surged rapidly using leverage without any special reason experienced sharp declines, which dampened investor sentiment. The narrowing of the decline near the close was likely influenced by remarks from a senior official of the Bank of Korea about taking measures due to exchange rate volatility concerns and a partial rebound in the Chinese stock market’s losses.”

By sector, defensive sectors such as insurance (2.91%) and telecommunications (0.18%), as well as transportation equipment (2.5%), showed strength in the KOSPI market. The insurance sector appeared to reflect expectations ahead of the first earnings announcement since the introduction of IFRS 17. Among equipment sectors, automobile-related stocks showed strength. Hyundai Motor’s first-quarter earnings grew 86% year-on-year, boosting investor sentiment. Hyundai Motor rose 4.7%, and Kia, which is scheduled to announce earnings on the 26th, rose 2.2%. Other stocks such as Hyundai Rotem (3.5%) and Hyundai Mobis (2.3%) also continued their upward trend.

On the other hand, secondary battery-related stocks continued their downward trend with sharp declines. LG Energy Solution fell 2.65%, LG Chem (-3.26%), Samsung SDI (-2.75%), and POSCO Future M (-4.4%) all declined. Lee Kyung-min, a researcher at Daishin Securities, said, “There is a general price correction across the secondary battery value chain stocks that surged this year. In particular, the decline is more pronounced among KOSDAQ stocks.” Among the top market cap stocks in the KOSPI, Samsung Electronics (-2.45%), SK Hynix (-1.95%), and Samsung Biologics (-1.38%) all fell.

The KOSDAQ index closed at 838.71, down 1.93% (16.25 points) from the previous trading day. In the KOSDAQ market, individual investors were the sole net buyers with 211.7 billion KRW, while foreign investors and institutions sold stocks worth 106.3 billion KRW and 118.8 billion KRW, respectively. Among the top market cap stocks, Ecopro BM (-6.46%), Ecopro (-0.17%), L&F (-5.4%), Kakao Games (-1.5%), JYP Ent. (-0.35%), Osstem Implant (-0.11%), and Pearl Abyss (-0.81%) declined, while Celltrion Healthcare (1.31%), HLB (0.44%), and Celltrion Pharm (0.12%) rose.

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