The KOSPI and KOSDAQ indices showed simultaneous slight gains on the 4th. Following the government's announcement of a tax reform plan last week, a significant decline occurred in the stock market due to disappointment, leading to the government and ruling party stepping back to indicate the possibility of reevaluating the plan, which seems to have been reflected in the market expectations.
As of 9:12 a.m. on this day, the KOSPI index was up 7.18 points (0.23%) from the previous trading day, reaching 3125.72. Individuals and institutions recorded net purchases of 40.5 billion won and 13.5 billion won, respectively, while foreign investors were net sellers of 47.3 billion won.
The top 10 companies by market capitalization in the securities market are showing mixed trends. Samsung Electronics, LG Energy Solution, Samsung Biologics, Samsung Electronics Preferred, KB Financial, and Kia are on an upward trend. In contrast, HD Hyundai Heavy Industries is showing a decline of over 2%, while SK hynix, Hanwha Aerospace, and Hyundai Motor are also experiencing losses.
The KOSDAQ index also recorded an increase of 4.55 points (0.59%) compared to the previous trading day, reaching 777.39. By investor type, individuals are net buyers of 31.3 billion won, while foreign investors and institutions are net sellers of 26.4 billion won and 3.3 billion won, respectively.
The top 10 companies by market capitalization in the KOSDAQ market also show mixed trends. LigaChem Biosciences and Peptron are showing strong gains in the 3% range, while Alteogen, EcoproBM, Ecopro, and Sam Chun Dang Pharm are also on an upward trend. In contrast, HLB, PharmaResearch, Rainbow Robotics, and HUGEL are showing declines.
The Ministry of Economy and Finance announced on the 31st of last month a tax reform plan that lowers the threshold for large shareholders subject to capital gains tax from the current 5 billion won to 1 billion won, and applies a maximum tax rate of 35% on dividend income.
Investors have reacted strongly against this. They argue that this policy may lead large shareholders to sell off stocks at the year-end to avoid capital gains tax, negatively impacting stock prices. There is also disappointment as the initial proposal suggested a maximum rate of 25% for separate taxation.
In response to strong opposition from investors, the ruling Democratic Party of Korea appears to be stepping back. Kim Byung-ki, the floor leader of the Democratic Party of Korea, stated through his social media that they would consider adjusting the large shareholder threshold to 1 billion won.
On the last trading day, the New York stock market closed lower as employment indicators sharply worsened. The Dow Jones Industrial Average fell 542.40 points (-1.23%) from the previous trading day, closing at 43,588.58. The S&P 500 index closed down 101.38 points (-1.60%) at 6,238.01, and the Nasdaq Composite Index fell by 472.32 points (-2.24%) to close at 20,650.13.
While there were observations that the U.S. labor market was maintaining a good situation, the employment report released on this day showed the opposite results. In July, U.S. non-farm jobs increased by 73,000 compared to the previous month, falling far short of market expectations of 100,000. Additionally, the employment gains in May and June were revised down by 258,000 from prior announcements, leading to an increase in the unemployment rate from 4.1% to 4.2%.
With the U.S. labor market showing significant deterioration, U.S. government bond yields also plunged. The yield on the 2-year government bonds fell by 0.27% from the previous trading day to 3.68%, while the yield on the 10-year bonds dropped by 0.15% to 4.21%.
On this day, the exchange rate for won to dollar in the Seoul foreign exchange market showed an increase of 1.6 won (0.12%) compared to the previous day, standing at 1384.90 won.