On Dec. 24, Christmas Eve, the stock market closed slightly lower. Even though foreign funds flowed into the Korea Exchange as the won-dollar exchange rate plunged (easing won weakness) due to active intervention by currency authorities, the index reversed lower and finished down.
The KOSPI index closed at 4,108.62, down 8.7 points (0.21%) from the previous trading day. The KOSPI index opened at 4,136.24, up 18.92 points (0.46%) from the day before, but turned lower despite foreigners turning net buyers. In the Korea Exchange, foreigners were net buyers of 500 billion won. Institutions were net buyers of 200 billion won, while individuals showed a selling advantage of 700 billion won.
The plunge in the won-dollar exchange rate led foreign investors to turn to net buying. It is interpreted as the result of growing expectations that funds will flow into the domestic stock market as verbal intervention by currency authorities and tax support measures for domestic investment released by the government coincided. After breaking through 1,484 won and hitting a yearly high on the previous day, the won-dollar exchange rate fell sharply on the day, dipping below 1,450 won.
Lee Kyung-min, a researcher at Daishin Securities Co., said, "Despite the stronger won, the reason the KOSPI index pared early gains appears to be that investors who had built KOSPI long (buy) and won short (buying dollar futures) positions sold dollar futures and, in response, demand arose to unwind KOSPI long positions."
He added, "In the short term it may weigh on the index, but a medium- to long-term outlook for a stronger won and inducement to return to domestic stocks are positive for both foreign and individual investor flows next year."
Large-cap stocks on the Korea Exchange ended mixed. SK hynix (0.68%), LG Energy Solution (0.64%), Hyundai Motor (0.7%) and Kia (0.67%) rose. In contrast, Samsung Electronics (-0.36%), Samsung Biologics (-1.69%) and HD Hyundai Heavy Industries (-2.63%) fell.
The KOSDAQ index closed at 915.20, down 4.36 points (0.47%) from the previous trading day. Opening at 921.01, up 1.45 points (0.16%) from the previous session, the KOSDAQ index widened losses during the session on foreign selling and at one point fell to the 913 level.
On the KOSDAQ market, individuals and institutions had buying advantages of 42 billion won and 56 billion won, respectively. In contrast, foreigners dumped 54 billion won worth.
Of the top 10 KOSDAQ stocks by market capitalization, prices of seven fell. ABL Bio (0.27%) and LigaChem Biosciences (1.35%) ended the session at higher prices than the previous day. In contrast, Alteogen (-2.16%), EcoPro BM (-0.19%), Rainbow Robotics (-3.88%) and Kolon TissueGene (-2.39%) failed to find strength.
In the Seoul foreign exchange market, the won-dollar exchange rate ended weekly trading at 1,449.8 won as of 3:30 p.m., down 33.8 won from the previous day.