On the 1st, the KOSPI started lower on the back of renewed military clashes between the United States and Iran in the Middle East and hawkish (currency tightening-preferential) interest rate outlooks from the U.S. Federal Reserve (Fed).
The KOSPI opened at 6,784.29, down 35.73 points (0.52%) from the previous session. In the Korea Exchange, foreigners and institutions are net sellers of 180 billion won and 170 billion won, respectively, pulling the index lower. Individuals alone are net buyers of 330 billion won.
Top KOSPI market-cap stocks are generally weaker. As of 9:02 a.m. in the Korea Exchange, the bellwether Samsung Electronics(005930) is trading at 256,500 won, down 3,500 won (1.35%) from the previous day, while SK hynix(000660) is also down 11,000 won (0.66%) at 1,663,000 won. LG Energy Solution(373220) (-0.53%), Samsung Biologics (-0.66%), KB Financial Group (-2.02%), and LG Electronics (-3.23%) are all declining in unison.
The weakness in the domestic stock market is seen as reflecting the previous night's New York session closing broadly lower on Middle East-driven geopolitical risks and rate jitters.
On the 31st (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 53,185.90, down 0.70% from the previous session. The Standard & Poor's (S&P) 500 and the Nasdaq also fell 0.33% and 0.12%, respectively.
Investor sentiment cooled sharply as the United States and Iran launched large-scale reciprocal airstrikes targeting the Strait of Hormuz and U.S. military bases, escalating armed conflict in the Middle East. With U.S. President Donald Trump signaling massive retaliation, international oil prices also spiked, with October West Texas Intermediate (WTI) rising 2.83% to $85.76 per barrel.
Federal Reserve Chair Kevin Warsh hinted at the possibility of additional rate hikes at the Jackson Hole meeting if there is no confidence in cooling inflation, adding pressure as the probability of a 0.25-percentage-point increase in the benchmark rate at the Federal Open Market Committee (FOMC) in September has risen.
The KOSDAQ index opened at 831.96, down 2.33 points (0.28%) from the previous session. In the KOSDAQ market, foreigners and institutions are net sellers of 30 billion won and 18 billion won, respectively, while individuals are net buyers of 50 billion won.
Among large-cap KOSDAQ stocks, as of 9:02 a.m., Alteogen(196170) (-0.81%), EcoPro BM (-1.82%), EcoPro (-0.99%), and LigaChem Biosciences (-0.83%) are declining.