As concerns about a U.S. rate hike resurfaced, the KOSPI index opened lower on Aug. 31, the last trading day of August. With foreigners and institutions net selling together early in the session, most large caps, including major semiconductor stocks, are falling.
The KOSPI index started trading at 6,613.58, down 175.30 points (2.58%) from the previous trading day. As early losses widened into the 3% range, the index even fell to the 6,500 level.
In the main board, foreigners and institutions are net sellers, but individuals are net buyers. From early in the session, other corporations have been net buying, which is presumed to be share repurchases by Samsung Electronics and SK hynix. As other-corporate funds flow in, the index's decline has narrowed somewhat.
U.S. stocks fell across the board over the weekend. As Government Bonds yields rose following hawkish (preference for monetary tightening) remarks by U.S. Federal Reserve Board Chair Kevin Warsh, most tech stocks weakened. Nvidia, which had surged right after releasing strong results, fell more than 4.5%.
Warsh attended the Jackson Hole meeting on the 28th, where global Central Bank governors gather, and said, "Although recently released inflation indexes were favorable, they are insufficient to explain a slowing of underlying inflation," hinting at the possibility of additional tightening.
After Warsh's remarks, U.S. Government Bonds yields rose, led by short-dated maturities. While views had leaned toward the Fed holding rates at the September Federal Open Market Committee meeting, expectations for a hike have grown. Rising U.S. Government Bonds yields appear to be weighing on Korea's stock market as well.
However, in the main board, bank stocks such as KB Financial Group(105560) and battery stocks such as LG Energy Solution(373220) are holding up somewhat.
The KOSDAQ market is also on a decline. The KOSDAQ index opened down 2% and started trading at the 820 level, but as early losses widened into the 3% range, it fell further to the 810 level. Most bio and semiconductor materials, parts, and equipment stocks are falling sharply. Among KOSDAQ large caps, only a few names such as CLASSYS and Onconic Therapeutics(476060) are rising slightly.
While foreigners and institutions are net selling in the KOSDAQ market as well, individuals are net buying. With no clear force to support the market, the KOSDAQ index's decline is steeper.