The Korean stock market rebounded due to favorable winds from the United States. This was largely because the tariff impact was not significantly reflected in the U.S. July Consumer Price Index (CPI), which had heightened market caution.
The KOSPI index closed at 3224.37 on the 13th, up 34.46 points (1.08%) from the previous trading day. Although the KOSPI index started strong with a 1% rise and seemed to lose some of its gains in the morning, it continued its upward trend and regained the 3200 level within a day.
Foreign investors led the index rise by making a net purchase of 633.6 billion won in the KOSPI market that day. Individuals and institutions showed a selling bias of 659.6 billion won and 81 billion won, respectively.
The U.S. July CPI, which fell 0.1 percentage points below market expectations, significantly alleviated inflation concerns. Looking at the CPI by item, there was no trend of passing tariffs onto product prices.
The market expects a rate cut at the upcoming Federal Open Market Committee (FOMC) meeting in September. Participants in the Chicago Mercantile Exchange (CME) FedWatch Tool are reflecting a 94.2% probability of a rate cut in September.
Park Sang-hyun, a researcher at iM Securities, noted, "The market is already factoring in a rate cut, and with the ongoing pressure from the Donald Trump administration, it won't be easy for the Federal Reserve (Fed) to avoid cutting rates in September. Instead, depending on the upcoming employment figures, there is a possibility they will consider a 'big cut' (0.5 percentage points reduction)."
There were significant disparities among sectors. While semiconductor, shipbuilding, display, and nuclear power sectors saw gains, the construction, cosmetics, food and beverage, and defense sectors showed weakness.
In particular, news that Samsung Display had effectively won its lawsuit over the 'organic light-emitting diode (OLED) trade secret infringement' filed against China's BEO caused the display sector to surge. LG Display jumped more than 20% in a day, setting a new high in the past year. BH, Duksan Neolux, and Iljin Display also recorded double-digit stock price increases.
On the other hand, the construction sector saw its stock prices decline amid growing concerns that the industry could falter after President Lee Jae-myung declared a war on industrial accidents. Stocks of Hyundai E&C, DL E&C, GS Engineering and Construction, and Daewoo E&C all closed at lower prices than the previous day.
Lee Jae-won, a researcher at Shinhan Investment Corp, analyzed, "Expectations for a rate cut remain, and there has even been good news for the display industry, which has long been lagging behind in competition with China. As earnings wrap up and rate concerns ease, it is necessary to confirm the policy momentum."
The KOSDAQ index closed at 815.1, up 6.91 points (0.86%) from the previous trading day. Foreign investors and institutions made net purchases of 9 billion won and 24.6 billion won, respectively, while individuals sold a net 23.4 billion won.
The KOSDAQ market also showed an upward trend, mainly driven by semiconductor-related stocks due to the impact of the Samsung Display lawsuit. The Korea Disease Control and Prevention Agency's forecast of an increase in COVID-19 patients also contributed to the strong performance of related stocks such as WOOJUNG BIO and GREEN Life Science.
That day, the exchange rate in the Seoul foreign exchange market closed at 1380.6 won, down 4.9 won from the previous day against the U.S. dollar.