As exchange rates and bond interest rates fluctuated sharply, the KOSPI index fell below the 2600 level for the first time in nine trading days. The KOSDAQ index also surrendered its gains from the previous day, dropping below the 720 level.
On the 22nd, the KOSPI index closed at 2593.67, down 31.91 points (1.22%) from the previous day. Individuals initiated a 'buy' with net purchases of 94.51 billion won in the KOSPI market, but foreigners and institutions sold off a net 48.32 billion won and 43.18 billion won, respectively, dragging the index down. This was the largest net sell-off by both foreigners and institutions this month.
The KOSDAQ index closed down 5.95 points (0.82%) at 717.67. In the KOSDAQ market, both institutions and foreigners showed a selling advantage, with net sales of 5.75 billion won and 5.51 billion won, respectively, while individuals recorded a net purchase of 116.6 billion won.
From the early trading hours, both the KOSPI and KOSDAQ indices exhibited downward trends. The yield of U.S. Treasury 10-year bonds, which serves as a benchmark for global bond rates, surpassed 4.5%, putting pressure on the stock market. This was a result of poor bidding results for U.S. Treasury 20-year bonds overnight. The bond yield increased from 4.81% last month to 5.1%, raising concerns over demand.
Additionally, as large-scale tax cut policies pushed by the House Republican Party coincided with a downgrade in the national credit rating, interest rates surged.
Exchange rates also fluctuated. In the Seoul foreign exchange market, the won-dollar exchange rate closed at 1381.3 won, down 5.9 won from the previous day. After starting at 1377 won, the rate continued to fluctuate. This is interpreted as the market reflecting the possibility of a strengthening of the won against the dollar.
The performance varied by sector. Reflecting the decline in U.S. technology stocks, semiconductor stocks such as Samsung Electronics and SK hynix fell. Due to exchange rate pressures, the automotive sector, including Hyundai Motor and Kia, along with the shipbuilding sector, including HD Hyundai Mipo, Samsung Heavy Industries, and Hanwha Ocean, also showed weakness.
Conversely, airline stocks such as Korean Air and Asiana Airlines, which see improved revenue when exchange rates decline, closed higher. Domestic stocks like Shinsegae, Hyundai Department Store, and Lotte Shopping also performed well.
Moreover, news of a resurgence of COVID-19 in China and Southeast Asia led to gains for diagnostic kit stocks and treatment sectors, including Seegene and SD BIOSENSOR.
There is a prevailing opinion that the market will continue to be watchful for the time being. However, some believe it is noteworthy that Bitcoin surpassed $110,000, hitting an all-time high, alongside safe assets like gold and the Japanese yen. While there may be a diminished trust in the dollar, this could also indicate that the appetite for risk assets remains alive.
Lee Kyung-min, a researcher at DAISHIN SECURITIES, noted, "This suggests that the investment sentiment for risk assets and market liquidity remains robust," adding, "After a cooling off of short-term volatility, the liquidity that has flowed out from the U.S. may manifest as relative strength in stock markets outside of the U.S."