The KOSPI index narrowed its intraday decline on the 31st and is fluctuating around 6,600. Amid concerns over rising U.S. interest rates, foreign investors and institutional investors are selling off shares, while retail investor buying pressure and share buybacks by Samsung Electronics and SK Hynix are supporting the market.
At 1 p.m. on this day, the KOSPI index was calculated at 6,685.72, down 103.16 points (1.52%) from the previous trading day. Just six minutes after the market opened, it fell sharply by 241.12 points (3.55%) to 6,547.76 before rebounding slightly. The intraday high was 6,728.79.
According to cumulative data from Korea Exchange and NextTrade, other corporations bought net worth of 1 trillion 83 billion won, while retail investors purchased net worth of 497.3 billion won. Institutional investors sold off net worth of 852.5 billion won, and foreign investors sold off net worth of 659.2 billion won. Among institutional investors, the largest net selling amounts were from private funds (431.4 billion won), securities firms (344 billion won), investment trusts (76.8 billion won), and pension funds (19.2 billion won).
It is estimated that other corporations' buying pressure was largely driven by Samsung Electronics and SK Hynix, which had announced share buybacks. Both companies had publicly disclosed plans to purchase 2 million shares and 650,000 shares respectively in the market, and intermediary securities firms are currently listed among the top buyers at this time.
However, it appears that the stock price defense effect from share buybacks was insufficient to overcome pessimism about interest rate trends. Samsung Electronics traded down 5,000 won (1.95%) at 252,000 won compared to the previous day, and SK Hynix traded down 37,000 won (2.24%) at 1.616 million won, exerting downward pressure of approximately 45 points on the KOSPI index.
Semiconductor-related stocks such as SK Square, Samsung Electric, Samsung Life Insurance, and Samsung C&T all showed weakness in the 1st% range. Among top market capitalization stocks, Doosan Enerbility, which fell due to adverse news from a major flood in Nepal, dropped by over 6%. KB Financial Group, expected to benefit from rising interest rates, fluctuated within a slightly positive range.
Kevin Warsh, Chair of the Federal Reserve System (Fed), delivered his keynote speech at the Jackson Hole Economic Policy Symposium on the 28th (local time), adding momentum to the argument for rising interest rates. This is interpreted as having led to a contraction in expectations for AI capital expenditure (CAPEX).
On the same day, in the New York stock market, the S&P 500 index fell by 0.25% and the NASDAQ Composite Index dropped by 0.52% compared to the previous day, while the Philadelphia Semiconductor Index widened its decline to 3.47%.
Kim Yoon-jeong, a researcher at LS Securities, stated, "Chair Warsh remarked that if price indicators do not move toward target levels at an appropriate pace, there is still work left for the Federal Reserve, expanding the possibility of further tightening." He added, "Interest rates rose by 11.8 basis points (0.118%) to record 4.348%, primarily driven by two-year U.S. Treasury yields, and the FedWatch Tool's September base rate hike expectation surged to 57.5%."
The schedule of upcoming economic data releases is also a factor causing hesitation in active buying in the domestic market on this day. In Korean time, the U.S. Department of Labor's Job Openings and Labor Turnover Survey (JOLTS) will be released late on the 1st of next month, followed by the ADP (Automatic Data Processing) non-farm employment report late on the 2nd, and the U.S. Bureau of Labor Statistics (BLS) non-farm employment index late on the 4th. Additionally, the South Korean government's monthly export statistics, which reflect domestic semiconductor export trends, will be released on the 1st of next month.
Han Ji-young, a researcher at Kiwoom Securities, said before the market opened, "Chair Warsh's remarks at the Jackson Hole meeting were heavily focused on reiterating the Federal Reserve's dual mandate of price stability and full employment. Therefore, it is appropriate to continue placing high importance on inflation and employment indicators as in the past."
The researcher further added, "Within the stock market, Broadcom's earnings announcement early on the 3rd is the main event. Changes in AI revenue guidance and the pace of revenue recognition will be crucial, and it would be appropriate to reflect in weekly strategies that the results will have a significant impact not only on U.S. AI stocks but also on the domestic market."
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