KOSPI and KOSDAQ indices gave up early gains on the morning of the 12th and closed lower. Many investors appeared disappointed as the presidential office expressed its intention to 'monitor' the criteria for major shareholders subject to the capital gains tax.
The KOSPI index closed at 3189.91 that day, down 16.86 points (0.53%) from the previous day. The KOSPI index relinquished the 3200 mark after three trading days. The KOSDAQ index also closed down 4.66 points (0.57%) at 807.19.
Both KOSPI and KOSDAQ indices were strong in early trading. The uncertainty stemming from the U.S. and China agreeing to extend trade negotiations had a significant impact.
However, starting from 11 a.m., the decline began to widen. This happened after the presidential office stated that its stance on the tax reform plan, which would revert the capital gains tax threshold for major shareholders from 5 billion won to 1 billion won, had not changed.
Earlier, the Democratic Party of Korea conveyed its opinion to the government to maintain the current criteria for major shareholders during a high-level party-government council, which heightened market expectations, but the presidential office drew a line.
In contrast to the weakened Korean stock market, major Asian stock indices, including those in China, Hong Kong, and Taiwan, all rose that day. Notably, the Nikkei 225 index in Japan reached an intraday high of 42,999.71 yen, setting a new all-time record.
In the afternoon, foreign investors also turned to 'selling' following institutions. On that day, institutions sold a net 98.1 billion won, while foreigners sold a net 60.5 billion won. Individuals showed a net buying advantage of 63.6 billion won. In the KOSDAQ market, foreigners and institutions sold net amounts of 7.4 billion won and 3.1 billion won, respectively, while individuals bought a net 14.5 billion won.
The upcoming U.S. Consumer Price Index (CPI) for July is also believed to have influenced the cautious sentiment.
The market expects the July CPI to rise by 2.8% compared to the same period last year. The core CPI, excluding the volatile food and energy prices, is estimated to have increased by 3.1% during the same period.
If the CPI falls below market expectations, inflationary pressures will ease, thus increasing the likelihood of an interest rate cut that the market is waiting for. Conversely, if the CPI exceeds market expectations, inflation concerns due to tariffs will resurface, making it difficult to predict the monetary policy path.
Lee Kyung-min, a researcher at DAISHIN SECURITIES, noted, 'According to the CPI concerns, foreigners and institutions are taking profits mainly from leading stocks in shipbuilding, defense, and cosmetics sectors.'
Among the top market capitalization stocks in the KOSPI market, Samsung Electronics and SK hynix saw their stock prices rise compared to the previous day. This was due to memory semiconductor company Micron raising its earnings outlook. Micron is the first in the memory semiconductor industry to announce quarterly results, earning the nickname 'barometer of the market.'
In contrast, LG Energy Solution, Samsung Biologics, and Hanwha Aerospace closed lower. Doosan Enerbility showed a stock price drop of over 5%.
Among the top market capitalization stocks in the KOSDAQ market, stocks such as Alteogen, ECOPRO BM, Ecopro, and Peptron traded at higher prices than the previous day. However, PharmaResearch, LigaChem Biosciences, and Rainbow Robotics closed lower.