On the 18th, the KOSPI index, which rode a roller coaster, closed slightly higher to hold the 7,500 level. Even amid numerous headwinds, including a surge in U.S. Government Bonds yields, signs that the war between the United States and Iran is dragging on, and a sharp rise in international oil prices, household funds flowed into the stock market and helped defend the index.
The KOSPI index finished at 7,516.04, up 22.86 points (0.31%) from the previous trading day. In the main board, foreigners posted a net sell of 3.65 trillion won, while individuals bought a net 2.2 trillion won and institutions bought a net 1.4 trillion won. Most of the institutional net buying came through the financial investment account, where exchange-traded fund (ETF) transactions are tallied.
The KOSPI index's intraday swing reached 500 points. The market opened lower and plunged to the 7,140 level early in the session, but turned higher by late morning. As Samsung Electronics rebounded sharply, the index even reclaimed the 7,630 level.
The reason the index faced a sharp correction as heavy sell orders hit early in the session was external headwinds. Over the weekend, the U.S.-China summit ended without notable results, and concerns that the Iran war will be prolonged sent U.S. Government Bonds yields sharply higher. As risk appetite cooled, U.S. stocks, which had been on a rally, all closed lower.
This served as a pretext for a strong correction in Korea's previously surging stock market. Losses were pronounced in large-cap semiconductor stocks and Hyundai Motor and LG Group shares, which had risen sharply. As the KOSPI 200 futures index tumbled, a "sell sidecar," which temporarily halts program sell quotes, was triggered.
Despite the plunge in the index, household funds continued to head into the stock market. Individual funds flowed into equities through direct investment and ETF buying.
In addition, expectations grew that the intensifying labor-management conflict at Samsung Electronics could ease somewhat. Following the prime minister's mention over the weekend of invoking emergency adjustment powers, President Lee Jae-myung also delivered a tough message to the union. A court largely granted Samsung Electronics management's request for an injunction to ban illegal industrial action by the union.
As a result, large IT stocks such as Samsung Electronics, SK hynix and Samsung Electro-Mechanics, which had been falling in the morning, closed higher. However, HANMI Semiconductor and CJ, which posted earnings shocks, slumped.
The KOSDAQ index fell. It ended the session at 1,111.09, down 18.73 points (1.66%) from the previous trading day. In the KOSDAQ market, foreigners were net buyers, but institutions, including pension funds, sold heavily on a net basis.