The KOSPI index widened its losses during the afternoon session on the 22nd, falling below the 5,500 level. Factors cited as cooling investor sentiment include continued simultaneous selling by foreign and institutional investors, the Bank of Korea’s message reaffirming a tightening outlook in line with market expectations, and broad weakness across Asian markets.
At 1:50 p.m. on the day, the KOSPI index was calculated at 5,545.74, down 189.92 points (3.31%) from the previous trading session. It is experiencing a sharp drop that exceeds the previous day’s gain of 182.92 points.
Based on combined data from the Korea Exchange and NextTrade, retail investors made net purchases worth 946.7 billion won, while foreign investors sold a net 633.5 billion won and institutional investors sold a net 345.4 billion won.
Samsung Electronics traded at 214,000 won, down 9,500 won (4.25%), and SK Hynix traded at 1,215,000 won, down 79,000 won (6.11%). All of the top 10 stocks by market capitalization are in negative territory.
Looking at the intraday flow, the KOSPI index started the session with a slight decline in the 1st% range, rebounded modestly, and then began to slide around 10:00 a.m., just as the Bank of Korea’s Monetary Policy Board announced it would hold its base rate steady. The Monetary Policy Board held the base rate at 3.0% per annum on the day.
The Monetary Policy Board stated, “Going forward, inflation is expected to show an upward trend exceeding the target level for a considerable period as the transmission of elevated cost pressures persists and demand-side pressures gradually intensify.” It added, “We assess that uncertainty remains high regarding future inflation paths, related to movements in international oil prices and exchange rates, the pace of domestic demand improvement, and the extent of wage growth diffusion.”
It continued, “While ensuring that the inflation rate stabilizes at the target level over the medium term, we will operate monetary policy with due regard for financial stability.” It further noted, “Future monetary policy decisions regarding the timing and pace of additional hikes will be made while closely monitoring inflation and economic trends as well as financial stability conditions.”
Previously, the median of the six-month-ahead conditional base rate forecasts by Monetary Policy Board members, disclosed by the Bank of Korea in August, was 3.25% per annum. Of a total of 21 forecasts, 16 were distributed at levels higher than the current interest rate of 3.0% per annum.
At this time, the KOSDAQ index is down 22.85 points (2.88%) from the previous day to 769.91. Retail investors made net purchases worth 302.1 billion won, while foreign investors sold a net 258.3 billion won and institutional investors sold a net 42.5 billion won.
All of the top 10 stocks by market capitalization are declining. In particular, selling pressure is spreading across all sectors, with Ecopro BM falling in the 9th% range, Jusung Engineering and Wonik IPS falling in the 7th% range, and Ecopro falling in the 5th% range.
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