The KOSPI index fell under pressure from selling by foreign and institutional investors. As the exchange rate and Government Bonds yields rose again, it is interpreted that profit-taking volumes emerged, leading to adjustments in the stock market.
The KOSPI index closed at 3,186.38 on the 16th, down 28.9 points (0.9%) from the previous day. The index gave up the 3,200 mark, which it had recovered for the first time in 3 years and 10 months, after just 3 trading days. The KOSDAQ index recorded a decline of 0.65 points (0.08%) to 812.23.
Samsung Electronics, the leader in the KOSPI market, continued its strong performance for two consecutive days after NVIDIA in the U.S. was allowed to resume exports of artificial intelligence (AI) chips to China. Alteogen, the top company by market capitalization in the KOSDAQ market, also set a new all-time high during trading after news that its subcutaneous injection form of the treatment 'ATL-B4' has completed its registration for a material patent in the U.S.
However, the rise of leading stocks could not change the direction of the index. This was due to the selling pressure from institutions and foreigners. In the KOSPI market, institutions and foreigners recorded net sales of 613.7 billion won and 76.1 billion won, respectively. Foreigners and institutions also executed net sales of 113.8 billion won and 67.5 billion won in the KOSDAQ market.
On that day, non-arbitrage transactions in program trading showed a sell bias with 411.7 billion won. This accounted for a significant portion of the net selling by foreigners and institutions. Considering that non-arbitrage transactions occur in a way that large orders are placed across more than 15 different stocks, it indicates that the strong sell-off was prevalent across the market rather than specific stocks or sectors facing adverse conditions.
It seems that many investors took profits amid the surge in exchange rates and Government Bonds yields. The exchange rate of the Korean won against the U.S. dollar recorded 1,385.7 won, up 5.5 won from the previous session in the Seoul foreign exchange market. The yield on the 10-year U.S. Government Bonds also approached 4.5% again.
Concerns over tariff uncertainties are cited as a backdrop. The consumer price index (CPI) increase rate announced the previous day in the U.S. matched market expectations, but upward trends were detected in commodity prices. Concerns that tariffs, which the Donald Trump administration plans to impose starting August 1, could stimulate inflation remain unresolved.
There are diminishing expectations in the market that the U.S. Federal Reserve will resume rate cuts starting in September. According to the Chicago Mercantile Exchange (CME) FedWatch Tool, participants in the federal funds rate (FF) futures market reflect a 54% probability of a rate cut. Just a week ago, this figure was as high as 70%. In contrast, the probability of a rate freeze increased from 30% to 46% during the same period.
The U.S. producer price index (PPI) for June is scheduled to be released that night. For the time being, concerns over tariffs are expected to affect the market. Lee Kyung-min, a researcher at DAISHIN SECURITIES, noted, "I believe that the KOSPI index reached a new high the previous day, which heightened profit-taking sentiment," adding, "The sentiment about whether the influence of tariffs on prices will be temporary or permanent is expected to shape the direction of the stock market."
Among the companies by market capitalization in the KOSPI market, SK hynix, LG Energy Solution, and Hyundai Motor saw declines in their stock prices. Samsung Biologics, Hanwha Aerospace, and NAVER finished regular trading slightly higher than the previous day.
In the KOSDAQ market, among the top capitalized companies, stock prices for ECOPRO BM, Ecopro, and PharmaResearch fell. Peptron, Rainbow Robotics, and LEENO Industrial ended higher.
By sector, the weakness of securities, banking, and insurance, which had shown upward momentum, stood out. Mirae Asset Securities saw its stock price drop more than 7% in a single day. Woori Financial Group and KB Financial also had declines exceeding 5%. Hyundai Marine & Fire Insurance and Samsung Fire & Marine Insurance also showed downward trends.
Conversely, the stock prices of parts and equipment companies showed remarkable increases. TOPTEC hit the daily price limit after news that it supplied assembly equipment for prismatic batteries to SK On. Fine M-Tec and Duksan Neolux were also noted as beneficiaries of Apple’s "foldable iPhone," showing strong performance.