KOSPI Eases After Prior Rally as Foreign Investors Keep Selling
The KOSPI index and the won-dollar exchange rate are displayed on the electronic board at the dealing room of Kookmin Bank headquarters in Jung-gu, Seoul, on the morning of May 22, when the KOSPI opened higher.
The KOSPI, which showed a surging trend the previous day, is taking a breather in early trading on May 22, showing a slight downward trend. On the other hand, the KOSDAQ index is continuing its steep upward trend, surging more than 5% and triggering a buy sidecar for the second consecutive day.
According to the Korea Exchange, as of 10:06 a.m. on this day, the KOSPI is at 7,795.75, down 19.84 points (0.25%) from the previous session. The index opened at 7,873.12, up 57.53 points (0.74%) from the previous day, but turned downward during the session and is repeatedly fluctuating around the 7,800 mark.
In the KOSPI market, foreigners are maintaining a net selling position for the 12th consecutive trading day, net selling 1.259 trillion won (approximately $839.33 million). On the other hand, retail investors turned back to a ‘buy’ position in just one day, net selling 1.1177 trillion won, and institutions are also showing a net buying edge of 106 billion won.
Samsung Electronics is hovering around 297,000 won, down about 1%, as profit-taking orders emerged in early trading. SK Hynix is also showing a mixed trend, repeatedly fluctuating.
Among the top market capitalization stocks, SK Square and Hyundai Motor are showing a mildly bearish trend, while LG Energy Solution (2.49%), Samsung Electro-Mechanics (4.24%), and Doosan Enerbility (4.98%) are on the rise. In the KOSDAQ market, the second-largest market cap stock Alteogen (5.41%) is recovering its losses from the previous day, and Ecopro BM (9.23%) is also rising significantly.
At the same time, the KOSDAQ index is showing strength, recording 1,164.78, up 58.81 points (5.32%) from the previous session.
In the KOSDAQ market, a steep upward trend appeared from early trading, and a buy sidecar (temporary suspension of program buy orders) was triggered just 33 minutes after the market opened. This is the second consecutive trading day it has been triggered following the previous day. The conditions were met as the price of KOSDAQ 150 futures rose by more than 6% compared to the base price and the KOSDAQ 150 index rose by more than 3% compared to the final figure of the previous trading day, with both continuing simultaneously for 1 minute.
Overnight, the three major indices of the New York stock market all closed slightly higher, reflecting expectations of end-of-war negotiations between the United States and Iran. The Dow Jones Industrial Average rose by 0.55%, breaking its all-time high, and the Standard & Poor’s (S&P) 500 index and the Nasdaq index also rose by 0.17% and 0.09%, respectively.
Surrounding the end-of-war negotiations between the United States and Iran, positive signals and bleak signals are mixed. While U.S. Secretary of State Marco Rubio mentioned regarding the Iran negotiations that “there are some positive signals,” Iranian foreign media also reported that the two countries exchanged messages through Pakistan’s mediation and narrowed their differences. However, U.S. President Donald Trump is adhering to a hardline stance that he will not tolerate Iran maintaining highly enriched uranium, so whether a diplomatic settlement will be reached remains to be seen a little longer.
On this day, the won-dollar exchange rate opened at 1,504.7 won, down 1.4 won from the closing price of the previous trading day’s daytime session. The rate is expected to fluctuate in the low 1,500 won range. Min Kyung-won, an economist at Woori Bank, analyzed, “As the risk-on sentiment extends in the Asian market, a transition to net buying of foreign funds in the KOSPI is expected,” and added, “The dollar selling by exporters, who are showing an active selling response above 1,500 won, is also highly likely to contribute to expanding the decline during the session.”
According to the Seoul Foreign Exchange Brokerage, the 1-month won-dollar non-deliverable forward (NDF) traded in the New York market overnight was finally quoted at 1,503.90 won. The closing price at 2:00 a.m. finished trading at 1,508.00 won. As U.S. President Donald Trump continues to emphasize signals of ending the war with Iran, the foreign exchange market plans to closely watch domestic foreign supply and demand.
Overnight, President Trump revealed strong confidence in the possibility of reaching a negotiation settlement between the United States and Iran, stating, “The Iran war will end very soon.” U.S. Secretary of State Marco Rubio also mentioned that “there are some good signs,” raising expectations for an easing of tensions in the Middle East.
From President Trump’s perspective, with the midterm elections approaching, high inflation is leading to political pressure. This means there is a political demand to end the war as soon as possible and normalize the oil supply chain. There are less than 6 months left until the midterm elections in November.
Following such moves by President Trump, international oil prices also began to reflect the possibility of normalizing crude oil supply. West Texas Intermediate (WTI) crude futures fell by nearly 2% to $96.35 per barrel, and Brent crude for July delivery also finished trading at $102.58, dropping by more than 2%.
Yoon Young-sil
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