KOSPI and KOSDAQ indexes started lower on the 27th. The ongoing domestic political uncertainty following the December 3 martial law, in addition to the sharp rise in the won-dollar exchange rate, are putting pressure on the stock market.
The KOSPI index stood at 2412.44 at 9:07 a.m. that day, down 17.23 points (0.71%) from the previous day. At the same time, the KOSDAQ index recorded a decline of 5 points (0.74%) to 670.64. Only individual investors were in a buying mode in both the KOSPI and KOSDAQ markets, while foreigners and institutions showed a tendency to sell.
Among the top 10 companies by market capitalization in the KOSPI market, only SK Hynix and Celltrion saw gains, while Samsung Electronics, LG Energy Solution, and Samsung Biologics were weaker.
In the KOSDAQ market, stocks of companies such as Alteogen, HLB, Samchundang Pharmaceutical, and Shinseong Delta Tech are trading at higher prices than the previous day. EcoPro, EcoProBM, and LG Chem are in a downward trend.
In the Seoul foreign exchange market, the won-dollar exchange rate began trading at 1467.5 won. A rise in the won-dollar exchange rate may drive foreign investors away due to losses caused by the falling value of the won.
The primary reason for the rise in the won-dollar exchange rate is the strength of the dollar, but domestic political uncertainty is also contributing to the weakness of the won. The National Assembly will vote on the impeachment motion against acting President Han Duk-soo that afternoon.
Kang Dae-seok, a researcher at Yuanta Securities, noted that there is a time lag of about six quarters (18 months) for exports-oriented corporations to improve their performance in response to the rise in the won-dollar exchange rate, advising to focus on sectors with good profitability and ongoing foreign investment.
Researcher Kang said, 'Most sectors which have seen high levels of net buying from foreign investors, such as software, utilities, and media, have maintained or adjusted positively their revenue expectations this month.'
There are also opinions that a year-end effect may occur. Since 2000, the KOSPI index has experienced an average weekly increase of 1.14% over the first five trading days after the ex-dividend date, exceeding the average of 0.11% during other periods. During the same period, the increase rate on the last trading day of the year (0.38%) was also higher than the average of other days (0.024%).
Lee Kyung-min, a researcher at Daishin Securities, said, 'The cause of the year-start effect is that fund managers become more active in transactions starting from early January after the year-end settlement of accounts,' adding that 'the currently low valuation of the KOSPI index, which has approached rock bottom due to concerns over the December 3 martial law and sluggish export growth, may attract more attention.'