KOSPI, despite expectations of US-Iran negotiations, weakened due to cash-out pressure

South Korea’s Composite Stock Price Index (KOSPI) opened slightly higher on the 17th but quickly turned downward, currently showing a consolidation trend near 6,200 points. Market analysts believe that although there is still hope for progress in the US-Iran peace negotiations, it is difficult to be blindly optimistic about the outcome. Additionally, recent sharp rises in stock prices triggering profit-taking combined with this has led to a cautious investment sentiment.

By 10:47 a.m. that day, the KOSPI was at 6,198.91 points, down 27.14 points (0.44%) from the previous trading day. The index opened at 6,227.33 points, up slightly by 1.28 points (0.02%), but failed to maintain the upward momentum. In the main board market, individual investors net bought 596.6B won, while foreign investors and institutional investors net sold 674.6B won and 66.7B won respectively, dragging the index lower. However, in the KOSPI200 futures market, foreign investors and institutional investors net bought 45.5 billion won and 89.5 billion won respectively, showing a divergence from the spot market.

Overnight, the three major US stock indexes all rose. On the 16th local time, the New York Stock Exchange Dow Jones Industrial Average rose 0.24%, closing at 48,578.72 points; the S&P 500 index rose 0.26%, closing at 7,041.28 points; the Nasdaq Composite index rose 0.36%, closing at 24,102.70 points. The S&P 500 and Nasdaq indexes hit new all-time highs during the trading session. Market expectations that a second round of US-Iran peace negotiations might be held over the weekend, along with news that Israel and Lebanon agreed to a ten-day ceasefire, stimulated risk appetite. However, concerns about negotiations possibly reaching a deadlock also emerged, and international oil prices rose. On the 16th local time, Brent crude oil futures for delivery in June rose 4.7% to $99.39 per barrel; US West Texas Intermediate crude futures for May delivery rose 3.7% to $94.69 per barrel. Rising oil prices could increase corporate costs and inflationary pressures, posing a burden on the stock market.

Large-cap stocks showed sector-specific trends. Samsung Electronics fell 0.11%, to 217.25k won; SK Hynix fell 0.95%, to 1.14M won. Conversely, LG Energy Solution rose 0.72%, SK Square increased 0.43%, and Samsung Electro-Mechanics gained 6.26%. Samsung Biologics declined 0.80%, Hanwha Aerospace dropped 5.27%, and Doosan Energy fell 1.71%. Sector-wise, medical precision equipment and telecommunications rose 2.06% and 1.77%, respectively, while machinery, transportation equipment parts, and transportation warehousing declined over 1%. It is evident that external factors such as war, ceasefires, and oil price fluctuations have caused rapid and differentiated reactions in defense, energy, and cyclical-sensitive industries.

South Korea’s KOSDAQ index (KOSDAQ) also showed similar trends. During the same period, the KOSDAQ index was at 1,162.91 points, down slightly by 0.06 points (0.01%) from the previous trading day. The index opened at 1,166.78 points, rising 3.81 points (0.33%), then fluctuated near the flat line. In the KOSDAQ market, individual and institutional investors net bought 1.339 trillion won and 217.25k won, respectively, while foreign investors net sold 1.58 trillion won. In terms of individual stocks, Ecopro rose 2.82%, Ecopro BM increased 1.95%, and TissueGene gained 1.93%; while Alteogen fell 0.68%, Rainbow Robotics declined 0.16%, and Samchully Pharmaceuticals dropped 2.87%. Market analysts believe that the outcome of US-Iran negotiations, international oil prices, and foreign capital flows are likely to dominate short-term market trends. If such uncertainties are not resolved, the Korean stock market may continue to lack upward momentum in the short term, with clear stock differentiation.