South Korean President Yoon Suk Yeol saw the KOSPI and KOSDAQ indices rise for two consecutive trading days for the first time since the state of emergency. However, amid ongoing political uncertainty, with the U.S. Consumer Price Index (CPI) announcement and Quadruple Witching Day approaching, a volatile market is expected to continue.
On Nov. 11, the KOSPI index closed at 2,442.51, up 1.02% (24.67 points) from the previous day. On this day, domestic institutions bought a net 175.5 billion won in the securities market, driving the index higher. Foreign investors sold more than they bought, with a net sell of 141.3 billion won, and individual investors who initially started buying during the early trading session turned to a net sell of 120.9 billion won.
The KOSDAQ index closed at 675.92, up 14.33 points (2.17%) from the previous day. In the KOSDAQ market, individuals had a net purchase of 109.5 billion won. The passage of a bill to abolish the financial investment income tax in the National Assembly was interpreted as helpful to investor sentiment. Meanwhile, foreign and domestic institutions had net sales of 74.1 billion won and 36.8 billion won, respectively.
Both indices showed an upward trend again today, continuing from the previous day. This marks the first rise since the declaration and subsequent lifting of the state of emergency. In the securities market, 812 listed companies (86.6%) saw gains, while in the KOSDAQ market, the share prices of 1,466 companies (86.7%) increased.
The major stocks by market capitalization showed mixed results. NAVER closed up more than 4% on the back of simultaneous buying by foreign investors and domestic institutions. Other stocks like SK Hynix, Celltrion, Kia, and KB Financial also saw increases. Samsung Electronics remained flat while LG Energy Solution, Samsung Biologics, and Hyundai Motor traded at lower prices than the previous day.
In the KOSDAQ market, stocks like Alteogen, Ecopro, Lg Chem Bio, and Enchem closed lower. Conversely, the share prices of Ecopro BM, HLB, Hugel, and Classys rose.
Although both major indices have risen for two consecutive days, it is uncertain whether this upward trend will continue. There are several factors that could increase market volatility in the short term. The U.S. CPI for November will be announced tonight. With the U.S. Federal Open Market Committee (FOMC) meeting scheduled for Dec. 18, market participants are closely watching how much prices have risen.
Major global investment banks estimate that the headline CPI rose by 2.7% compared to the same period last year. The core CPI, which reflects the underlying trend of inflation excluding food and energy prices, is projected to have increased by 3.3% during the same period. This level is considered equal to or higher than that of October.
Park Seung-jin, a researcher at Hana Securities, noted, "While the November CPI is unlikely to have a significant impact on the upcoming FOMC meeting next week, if it deviates significantly from expectations, it could lead to increased volatility as the expected interest rate trajectory for 2025, which reflects '2 to 3 rate cuts,' may change."
Moreover, Quadruple Witching Day is approaching on the 12th. Quadruple Witching Day refers to the expiration date of four derivatives: stock index futures and options, as well as individual stock futures and options. As investors settle futures and options contracts that are nearing expiration and enter new contracts, trading volume increases and stock price volatility rises.
Political uncertainty regarding President Yoon is also growing. The opposition party, including the Democratic Party of Korea, has decided to conduct another vote on the impeachment motion against President Yoon on the 14th.
Lee Kyung-min, a researcher at Daishin Securities, said, "While it is unlikely to expect a strong rebound until the uncertainty completely dissipates, it is still encouraging that the stock market has identified a bottom. I expect the stock index to continue fluctuating according to the anxiety sentiment, solidifying the bottoming phase."