On the 21st, KOSPI opened above the 6,750 level, down more than 1% from the previous day. The drop came as all three major U.S. indexes fell the day before on continued gains in U.S. Government Bonds yields and the fallout from disappointing results at consumer bellwether Walmart, which appeared to weaken investor sentiment in the domestic market.
At 9:02 a.m., the KOSPI was at 6,773.87, down 78.71 points (1.15%) from the previous session. The index opened at 6,759.95, down 92.63 points (1.35%) from the prior day, then trimmed some of its losses right after the open.
By investor type, foreigners and institutions in the main board were net sellers of about 200 billion won and about 90 billion won, respectively, pressuring the index. Individuals alone were net buyers of about 290 billion won, absorbing supply.
Most top market-cap stocks were weaker. Bellwether Samsung Electronics(005930) was trading at 267,000 won, down 1.48% from the day before, and SK hynix(000660) was at 1,674,000 won, down 1.01%. Major blue chips such as Samsung Electro-Mechanics (-5.30%), SK Square (-3.74%), HD Hyundai Heavy Industries (-3.15%), Hyundai Motor (-2.75%), Hanwha Aerospace (-2.74%), and Samsung Biologics (-2.22%) were broadly lower. By contrast, some financials and others, including KB Financial Group (0.19%), Shinhan Financial Group (0.20%), and Doosan Enerbility (0.92%), inched up.
At the same time, the KOSDAQ was at 818.79, down 22.10 points (2.63%) from the previous session. The index opened at 824.05, down 16.84 points (2.00%) from the prior day, then extended losses. On the KOSDAQ, foreigners and institutions were net sellers of about 30 billion won and about 20 billion won, respectively, while individuals were net buyers of about 50 billion won.
The latest weakness in Korean stocks is seen as the result of compounded worries over bond-market instability and slowing consumer indicators that erupted on Wall Street. On the 20th (local time), on the New York Stock Exchange (NYSE), the Dow Jones Industrial Average finished at 52,759.21, down 1.32% from the previous session. The Standard & Poor's (S&P) 500 fell 0.87% to 641.16, and the tech-heavy Nasdaq closed down 1.00% at 26,067.17.
The U.S. Treasury signaled it would expand the size of Government Bonds buybacks (early repurchases) to more than $4 billion, but the market said that was insufficient to resolve structural supply-demand issues. As a result, yields continued to rise, with the U.S. 10-year Government Bonds yield topping 4.70%, heightening caution toward risk assets.
Walmart, the consumer bellwether, plunged 9% after missing forecasts for sales and net income, marking its steepest drop in about four years, which also weighed on sentiment. As Walmart's weak showing spread concerns about a U.S. economic slowdown, selling extended across retail and consumer names, adding downside pressure to the domestic market.
Still, expectations for an upturn in the memory-chip cycle and a buyback catalyst at SK hynix lifted memory names, with SK hynix ADR up 4.4% and Micron up 4.0%, and the Philadelphia Semiconductor Index finished up 0.53%.