The KOSPI index fell nearly 3% after three days. The expectation that the index could break its all-time high was clouded by the retreat in expectations of a U.S. interest rate cut and profit-taking in domestic leading stocks 'shipbuilding, defense, and nuclear energy.' On the 20th, the index even fell below the 3100 level during trading for the first time in about a month.
Foreign investors are also quickly turning away. After purchasing 6.2621 trillion won worth of domestic stocks last month, foreign investors have net sold nearly 700 billion won this month.
In the securities industry, analysts noted that given the increased volatility of the domestic stock market, even in the absence of specific negative factors, profit-taking could significantly increase in the short term. Experts advised that if one is looking for buying opportunities, it might be wise to consider them after the end of the month, as major domestic and international events are lined up until the 25th.
If we look for external issues, the closest market event is the Jackson Hole meeting. On the night of the 22nd in Korean time, Jerome Powell, Chairman of the U.S. Federal Reserve, is scheduled to make a statement, determining the direction of future U.S. currency policy. With speculation continuing about the possibility of a mid-term replacement for Chairman Powell, whose term lasts until May 15 next year, the market is paying attention to how he will address the timing and extent of interest rate cuts.
Kim Dae-jun, a researcher at NH Investment & Securities, said, "How Chairman Powell responds to President Donald Trump's pressure for an interest rate cut will be crucial," adding, "In particular, his agreement on a rate cut is significant."
Domestic political events are also lined up. Key bills, including the second amendment to the Commercial Act, will be presented during the extraordinary session of the National Assembly from the 21st to the 25th. While the Democratic Party is leading the processing of contentious legislation, the People Power Party plans to counter with a filibuster.
A Korea-Japan summit is scheduled for the 23rd, followed by a Korea-U.S. summit on the 25th. In particular, at the Korea-U.S. summit, there is a high possibility of detailed adjustments regarding tariff negotiations. Kim Jae-seung, a researcher at Hyundai Motor Securities, noted, "Given the economic delegation, investments centered around semiconductors, shipbuilding, automobiles, secondary batteries, and machinery are expected to be announced," adding, "If the government provides incentives to related corporations through an investment fund for the U.S., interest in companies with production facilities in the U.S. or those scheduled for investment is likely to increase in the Korean stock market." However, the market remains cautious due to significant uncertainty.
There is a possibility that a major shareholder transfer tax reform (from 5 billion won to 1 billion won) will be finalized within this month, which has drawn significant interest from investors. While there is hope that the current threshold of 5 billion won will be maintained due to investor backlash, there is also a possibility of it being strengthened.
Na Jeong-hwan, a researcher at NH Investment & Securities, explained, "Given the high expectations for the amendment to the Commercial Act, if it is announced negatively contrary to market expectations, there could be disappointment selling," adding, "However, the KOSPI index is expected to find support around the 3000 and 2900 levels."
If you're considering stock investments, waiting for a moment might be a rational strategy. Na noted, "The government is strongly committed to revitalizing the domestic stock market, so if the index falls, there is a high likelihood of favorable policies emerging," and suggested, "It is necessary to approach buying opportunities after adjustments due to short-term events have passed."