KOSPI, which opened higher on the 1st, reversed lower under combined selling by foreigners and pension funds. KOSDAQ, which marks its 30th anniversary of opening, is extending gains after shaking off early weakness.
As of 11:40 a.m. that day, the KOSPI index was down 191.57 points (2.26%) from the previous trading day at 8,284.91. The index climbed to as high as 8,620.21 intraday at the open, but turned lower in about 30 minutes and fell toward the 8,200 level.
A foreign selling streak that has continued for nine trading days is cited as a major reason for the decline. In the main board that day, foreigners were net sellers of 1.5 trillion won and institutions 300 billion won. Among institutions, pension funds also showed a selling advantage of 175 billion won. Individuals were net buyers of 1.8 trillion won, but that was not enough to absorb the supply from foreigners and institutions.
The resumption of National Pension rebalancing from that day is also cited as a factor increasing supply pressure. Pension funds started the session with about 70 billion won in net buying, but switched to net selling in less than 30 minutes after the open and have been expanding the size of sales. After the grace measure on rebalancing ended at the end of last month, the National Pension began adjusting the share of domestic stocks from that day.
However, National Pension Service (NPS) Chairman Kim Sung-joo drew a line through his social media that day against some claims of a "74 trillion won sell-off bomb." Kim said, "It is a ridiculous number and stokes excessive fear," adding, "At the fund management committee in May, we revamped the rebalancing rules to execute them gradually and precisely, so there is no possibility of a short-term large-scale sell-off or a 'sell-off bomb.'"
Most large-cap stocks by market capitalization are also weak. Samsung Electronics and SK hynix are down 4% and 3%, respectively, and Samsung Electro-Mechanics, which was strong early in the session, has turned slightly lower.
Meanwhile, rotation continues as funds exiting semiconductors move into shipbuilding, defense, and power stocks. Although the KOSPI is falling that day, gainers number 668 while decliners are 226, with gainers far ahead. LS Electric (9.24%), Hanwha Aerospace (9.05%), and Hyundai Rotem (7.40%) are also rising.
At the same time, the KOSDAQ index was up 18.67 points (2.04%) from the previous trading day at 934.85. Foreigners and institutions are net buying 65 billion won and 131 billion won, respectively, while individuals are net selling nearly 170 billion won.
A ceremony marking the 30th anniversary of the KOSDAQ market opening was held at the Conrad Hotel in Yeouido, Seoul, that day. In his commemorative address, Korea Exchange (KRX) Chairman Jung Eun-bo said, "We will overhaul the market structure, including a promotion–relegation segment, to restore the dynamism of the KOSDAQ market," and added, "In introducing the segment, we will actively listen to various market participants to minimize sources of conflict arising from the market structure overhaul."
In the Seoul foreign exchange market, the won–dollar rate opened 2.1 won lower than the previous trading day at 1,547.3 won, but then extended gains and is trading around 1,558 won. It rose to as high as 1,559.2 won intraday, the highest on a weekly trading basis since March 2009.