It was a day when the KOSPI and KOSDAQ indices helplessly collapsed under the selling onslaught from foreign and institutional investors. The effects of the hawkish (currency tightening preference) Federal Open Market Committee (FOMC) results in the U.S. influenced the market throughout the day. The KOSPI index fell below the 2400-level for the first time since the stock prices dropped due to martial law on the 10th of this month. The KOSDAQ index also fell more than 2%, recording its largest decline since the 9th.
On the 20th, the KOSPI index closed at 2404.15, down 31.78 points (1.30%) from the previous transaction day. The KOSPI index plummeted to 2389.86 during the session as the won-dollar exchange rate and U.S. Treasury yields soared in the afternoon. The reduction in the number of expected interest rate cuts next year from the Federal Reserve's dot plot, from 4 to 2, combined with the announcement of the third quarter U.S. Gross Domestic Product (GDP) growth rate at 3.1%, higher than last month's preliminary figure of 2.8%, had an impact.
Thanks to institutional investors reducing their selling pressure ahead of the market close, the index barely held onto the 2400-level. On that day, foreign and institutional investors net sold 821.2 billion won and 89.2 billion won, respectively. Individuals bought a net 790.2 billion won.
The top market capitalization stocks in the securities market mostly saw declines, except for slight increases in Kia (0.60%), Naver (0.24%), and Celltrion (0.05%). SK Hynix and LG Energy Solution fell more than 3%, and Samsung Electronics preferred shares also dropped by 2.71%. Samsung Biologics (-1.98%), KB Financial (-1.27%), and Hyundai Motor (-0.71%) also saw decreases.
Hyundai Marine & Fire Insurance (-6.60%) recorded its lowest price in a year amid securities firms' forecasts that it would be challenging to distribute dividends for the time being. Korea Zinc, which had seen its stock price exceed 2 million won earlier this month, plummeted by 7.04% once the date for the closure of the temporary shareholders' meeting passed, dampening market expectations surrounding a management rights dispute. The stock price fell below 1 million won for the first time since the 27th of last month.
The KOSDAQ index finished the transaction at 668.31, down 2.35% from the previous transaction day. It was the first time the KOSDAQ index had dropped to the 660 level since the 10th of this month (closing price 661.59). In the KOSDAQ market, foreign and institutional investors net sold 83.7 billion won and 34.1 billion won, respectively, pulling down the index. Individuals bought a net 133 billion won.
On that day, Lunit saw a significant drop of 11.90%, closing at 62,900 won due to the shock of executives disposing of a large stake in an after-hours block deal. The stock price fell by 25% over three transaction days.
Other high-cap stocks in the KOSDAQ market were mostly in the red. Ecopro fell by 4.07%, while Alteogen, Ecopro BM, and Ligand Pharmaceuticals dropped more than 3%. HLB (-0.85%), Shinseong Delta Tech (-0.19%), and Classys (-0.10%) also saw slight declines. Conversely, in a bearish market, Samchundang Pharmaceutical (3.51%), Hugel (1.63%), and Lino Industrial (0.21%) continued their upward trend.
Kim Ji-won, a researcher at KB Securities, noted, 'The market showed signs of increased risk aversion compared to the previous day,' and added, 'In both the securities and KOSDAQ markets, the proportion of rising stocks was only 20% (22% in the securities market and 15% in KOSDAQ), and despite a relaxation of domestic political uncertainties, the FOMC and Trump policy risks continued to be reflected in the market.'
Meanwhile, as of 3:30 p.m. on that day, the won-dollar exchange rate recorded 1,451.4 won, an increase of 0.5 won from the previous transaction day.