The Korea Composite Stock Price Index (KOSPI) closed higher, thanks to foreign investors' "buy" sentiment. Especially, large-cap stocks saw heavy buying, and the index rose by more than 1%. Institutional investors also joined in on the net buying, contributing further to the index's rise. Out of the top 30 KOSPI stocks by market capitalization, 18 closed higher.
On the 21st, the KOSPI index closed at 2,625.58, up 23.78 points (0.91%) compared to the previous transaction day. The index started at 2,615.90, up 14.10 points (0.54%) from the previous session, and even rose to 2,633.41 during the day. The intraday low was 2,614.73.
Overnight, the three major U.S. stock indices closed lower across the board. This marked the joint decline of the three indices for the first time in 14 days since the 6th. As uncertainties lingered over the U.S. Congress budget negotiations, expectations for a rate cut diminished, leading to a significant release of profit-taking sell-offs.
As a result, the domestic market is expected to continue to take a breather. However, foreign investors and institutions turned the tide with net buying. Foreigners net bought 225.5 billion won worth of stocks on this day. Institutions also net bought 91.9 billion won. Only individual investors were net sellers, offloading 348.2 billion won.
Expectations for tariff negotiations between the South Korean and U.S. governments improved investor sentiment in the domestic market. This is because practical trade discussions between the South Korean and U.S. governments to coordinate mutual tariff issues, driven by former U.S. President Donald Trump's administration, began on the 20th (local time) in Washington, D.C.
The strengthening of the won also encouraged foreigners' "buy Korea" sentiment. With the expectations surrounding the Korea-U.S. tariff negotiations, the won appreciated, leading the won-dollar exchange rate to reacquaint itself with the 1,380 won level for the first time in six months. As of 3:36 p.m. during the regular trading session, the won-dollar exchange rate was 1,386.6 won.
Foreigners poured 248.6 billion won into net buying of large-cap stocks on the KOSPI. They also net bought 411.3 billion won in the KOSPI 200 futures market on this day.
While semiconductor stocks such as Samsung Electronics and SK hynix, along with battery-related stock LG Energy Solution, showed weaknesses on this day, the stock prices of most other stocks rose. The stock price of Samsung Biologics increased by 7%, and Hanwha Aerospace rose by over 4%.
Shipbuilding stocks continued to show strength. The improved shipbuilding industry outlook combined with expectations for South Korea-U.S. shipbuilding cooperation drove the stock price of HD Korea Shipbuilding & Offshore Engineering to rise by over 4%. HD Hyundai Heavy Industries and Hanwha Ocean also closed strong, contributing to 18 out of the top 30 KOSPI stocks seeing increases.
Lee Jae-won, an analyst at Shinhan Investment Corp., noted, "The KOSPI index has been forming a V-shaped rebound since it fell to the 2,290 level on the low on April 9, and with foreign capital inflow continuing, the release of the U.S. Federal Open Market Committee (FOMC) minutes on the 27th will be a crucial turning point."
The KOSDAQ index also closed higher. It recorded a rise of 8.07 points (1.13%) to close at 723.62. It started at 720.64, up 5.09 points (0.71%) from the previous session, and increased its gains. Institutions and foreigners both participated in net buying, totaling 87 billion won and 45.6 billion won, respectively.
By stock, bio stocks concentrated in the top market capitalization of the KOSDAQ showed strength, driven by inflows of bargain hunting. The government's tariff relief support plan for the bio industry also acted as a positive factor, causing the stock price of Alteogen, the top KOSDAQ stock, to rise by over 2%.
In addition, stocks of Peptron, HUGEL, LigaChem Biosciences, and Sam Chun Dang Pharm also rose. Concerns over the re-emergence of the novel coronavirus (COVID-19) led to stocks of diagnostic kit makers such as Seegene rising on this day. Meanwhile, battery-related stocks like Ecopro and ECOPRO BM closed weakly.