Both the KOSPI and KOSDAQ indexes closed higher on the 5th. The recent U.S. employment data, which fell short of market expectations, seems to have fueled hopes that the Federal Reserve (Fed) will lower interest rates. Employment and inflation data set to be released before the September Federal Open Market Committee (FOMC) meeting is expected to determine the short-term direction of the stock market.
The KOSPI index closed at 3205.12 on this day, rising by 4.29 points (0.13%) from the previous day. Although it briefly fell below the 3200 mark during the trading session, it managed to rebound.
Institutional investors' 'buying' drove the KOSPI index. On this day, institutions purchased a net 131.4 billion won worth of stocks in the KOSPI market. Foreign and individual investors showed a selling bias of 155.8 billion won and 55.5 billion won, respectively.
The stock price directions of Samsung Electronics and SK hynix, the first and second largest companies by market capitalization in the KOSPI market, diverged. SK hynix's stock price rose by 3% after holding the number one position in DRAM market share for two consecutive quarters. In contrast, Samsung Electronics, which lost its throne, saw its stock price fall by 0.86% compared to the previous day.
LG Energy Solution and Hyundai Motor Company showed weakness following news that U.S. law enforcement authorities had conducted a surprise inspection of a factory in Georgia.
The KOSDAQ index finished at 811.4, up 5.98 points (0.74%) from the previous day. This marks the first time since the 14th of last month that the KOSDAQ index has exceeded the 810 mark based on the closing price.
In the KOSDAQ market, foreign and institutional investors had net purchases of 21.8 billion won and 20.2 billion won, respectively. Only individuals initiated a sell-off totaling 45.5 billion won.
The sector that drove the KOSDAQ index was biotechnology. Stocks of 'king stock' Alteogen, as well as PharmaResearch, ABL Bio, LigaChem Biosciences, and HLB recorded higher prices than the previous day.
Although President Lee Jae-myung expressed his willingness to foster the K-bio industry on this day, it seems that the impact of expectations for interest rate cuts is greater. The biotechnology sector tends to focus on developing new drugs through borrowing, so a decrease in interest rates reduces the borrowing burden.
As the U.S. labor market quickly freezes, the market is increasingly certain that the Fed will lower interest rates at the September FOMC meeting. The U.S. Department of Labor's July Job Openings and Labor Turnover Survey (JOLTS) showed that job openings hit the lowest level in the past 10 months, and the private employment reported by Automatic Data Processing (ADP) for August also remained at half the level of the previous month.
However, caution remains regarding the U.S. Department of Labor's August non-farm employment report due out that evening and the consumer price index (CPI) to be released on the 11th.
Lee Jae-won, a researcher at Shinhan Investment Corp., forecasted that 'with the two important indicators of the U.S. non-farm employment report and CPI remaining, the index is expected to fluctuate around two focal points: policy and interest rates in September.'
Park Seok-hyun, a researcher at Woori Bank, noted that 'if the non-farm employment report does not deviate significantly from market expectations, continuous expectations that the Fed will lower interest rates twice this year are likely to remain, positively impacting the market.'