With the war between the United States and Iran flaring up again, the KOSPI started lower. The KOSPI rebounded in early trading but then turned lower again.
The KOSDAQ index surged in early trading, triggering a buy-side sidecar for the second straight day.
On the 6th, the KOSPI opened at 5,491.02, down 92.88 points (1.66%) from the previous session. Right after the open, it looked like the losses would deepen more than 2%, but the index soon attempted a rebound. While defense and nuclear power-related stocks posted sharp gains, buying also flowed into the semiconductor sector, which had started lower.
Around 9:20 a.m., the index turned higher but soon fell back again.
The KOSDAQ is surging. After starting slightly higher, the KOSDAQ showed a sharp rise early in the session. As KOSDAQ150 futures prices jumped, a buy-side sidecar—suspending program buy quotes for five minutes—was triggered around 9:11 a.m. It was the second straight day a buy-side sidecar was activated, following the previous day.
Overnight, U.S. stocks plunged, but household funds are flowing into the domestic stock market in large volumes. In the morning, individual net purchases on the Korea Exchange exceeded 1 trillion won. As the KOSPI, which had crashed over two days on the 3rd and 4th, soared on the 5th, creating a "rollercoaster market," individuals appeared to be investing in stocks in hopes of price gains.
Foreign investors, by contrast, are net sellers of nearly 900 billion won. It appears to be the fallout from ongoing geopolitical instability stemming from the U.S.-Iran war. News the previous day that Iran attacked an oil tanker outside the Strait of Hormuz sent international oil prices soaring and reignited inflation fears in the United States.
Inflation is highly likely to lead directly to monetary tightening by the U.S. Central Bank, the Federal Reserve. As analysis grew that rate cuts are less likely, risk appetite weakened and U.S. stock indexes fell across the board.
Defense stocks such as Hanwha Aerospace and LIG Nex1 are strong, while APR, which faces growing expectations for improved earnings, is also surging. By contrast, declines in Samsung Electronics, SK hynix, and SK Square are continuing.