Buoyed by expectations for a U.S. benchmark rate cut, the KOSPI started higher but ultimately closed below the 3,900 level for the second straight session. As foreign selling overwhelmed the main board and led the decline, the KOSDAQ also finished lower on weakness in leading biotech names.
On the 24th, the KOSPI closed at 3,846.06, down 0.19% (7.20 points) from the previous session. The KOSPI opened at 3,915.16, up 61.90 points (1.61%), and held gains of more than 1%, but slipped below 3,900 as foreigners turned to net selling.
On the main board, individuals and foreigners were net sellers of 454.2 billion won and 423.2 billion won, respectively, dragging the index lower. In contrast, institutions alone net bought 896.3 billion won to defend the lower bound of the index.
Early in the session, the KOSPI rose, reflecting the rebound in U.S. stocks on the 21st, the last transaction day of last week (local time).
The early gains were due to the rebound in U.S. stocks on the 21st (local time). The three major U.S. indexes all closed higher as expectations for a December Fed cut revived following New York Fed President John Williams' comment about the possibility of "additional rate adjustments in the near future."
However, domestic investor sentiment has not fully recovered. Lee Jae-won of Daishin Securities Co. said, "Although the consensus for a December rate cut rebounded to nearly 70% over the weekend on dovish comments from major Fed presidents, investor sentiment still has not recovered."
Most large-cap names by market capitalization on the main board also finished lower. Except for Samsung Electronics, which drew bargain hunters on the view that the drop on the 21st was excessive, SK hynix, LG Energy Solution, Samsung Biologics, Hyundai Motor, HD Hyundai Heavy Industries, Doosan Enerbility, KB Financial, and Hanwha Aerospace all closed down.
After a spin-off, Samsung Biologics and Samsung Bioepis Holdings, which were relisted that day, also ended lower. In particular, Samsung Bioepis Holdings plunged about 28%.
However, shares related to Ukraine reconstruction, such as Doosan Bobcat, Hyundai E&C, HD Hyundai Infracore, and JUNJIN Construction Robot, finished higher after reports that the United States and Ukraine made progress in talks on a peace plan to end the Russia-Ukraine war.
The KOSDAQ closed at 856.44, down 7.51 points (0.87%) from the previous session. On the KOSDAQ market, individuals were net buyers of 64.7 billion won, while foreigners and institutions were net sellers of 40.2 billion won and 30.8 billion won, respectively.
Notably, weakness in biotech stocks leading the KOSDAQ stood out. Lee Jae-won of Shinhan Investment & Securities said, "The KOSDAQ underperformed the KOSPI, where the artificial intelligence (AI) value chain was strong, as large caps centered on biotech were weak," adding, "Improved sentiment on expectations for additional rate cuts within the year has been limited to AI-related stocks such as Robotics and semiconductor materials, parts, and equipment."
Peptron fell more than 15% on uncertainty over its contract with global pharmaceutical company Eli Lilly.
The securities industry saw a high likelihood that market volatility will expand this week, with key U.S. data still to come.
Lee Jae-won said, "Given that even a single comment by Fed President Williams widens volatility, market swings are expected to expand with the release of economic and inflation indicators such as the personal consumption expenditures (PCE) index and the Beige Book, the Fed's economic assessment report."