Kospi hovers near 5,240 as foreigners flip to net selling

Institutions buy 69.9 billion won, individuals 37.5 billion won to support index

US CPI tops forecasts, stoking fears of December 'big step' rate hike

Samsung Electronics, SK hynix swing between gains and losses

An employee works at the dealing room of Hana Bank in Jung-gu, Seoul, on Wednesday, as the Kospi trades flat in early session. [Yonhap]
An employee works at the dealing room of Hana Bank in Jung-gu, Seoul, on Wednesday, as the Kospi trades flat in early session. [Yonhap]

The Kospi was trading flat in early session Wednesday as concerns over a US interest rate hike intensified after American inflation came in stronger than expected.

Foreign investors flipped back to net selling after just one session on the buying side, though purchases by institutions and individuals were cushioning the index. With semiconductor heavyweights Samsung Electronics and SK hynix failing to find a clear direction, the tug-of-war among investor groups was intensifying.

According to Korea Exchange, the Kospi opened down 29.42 points, or 0.56 percent, at 5,209.71 before swinging in flat territory. Foreign net selling and institutional net buying were evenly matched on the supply-demand front.

Foreign investors, who had turned to net buying Tuesday and helped lift the index, reversed course Wednesday and were net selling around 78.1 billion won. Institutions were net buying 69.9 billion won, providing a floor for the index. Individuals were also on the buying side, with net purchases of 37.5 billion won.

The flat performance reflected a standoff between rate-hike concerns and bargain hunting. Overnight on Wall Street, all three major indexes fell after the US October consumer price index came in above market expectations, raising the prospect of another benchmark interest rate increase.

The Dow Jones Industrial Average fell 0.30 percent, while the S&P 500 and the NASDAQ Composite dropped 0.38 percent and 0.74 percent, respectively.

US October CPI rose 0.4 percent month-on-month, while core CPI — which strips out energy and food prices — climbed 0.3 percent. Both figures beat market forecasts by 0.1 percentage point, reinforcing expectations for further monetary tightening.

Investor sentiment was also weighed down by comments from Federal Reserve Governor Christopher Waller, who raised the possibility of a "big step" 50-basis-point rate hike ahead of the CPI release. The yield on the 10-year US Treasury note briefly topped 5 percent during trading.

Memory chip-related stocks weakened further as concerns about tighter semiconductor regulation mounted following a recently reported extramarital affair scandal involving Nvidia CEO Jensen Huang. Nvidia fell 5.47 percent, extending its sharp losses for a second consecutive session. Micron (-1.1 percent), SK hynix's American depositary receipts (-3.51 percent) and SanDisk (-2.99 percent) also declined. The Philadelphia Semiconductor Index edged down 0.35 percent.

The domestic market opened slightly lower in response but has since attempted to turn positive, still searching for direction. The two semiconductor giants have been swinging between gains and losses.

Samsung Electronics was down 0.25 percent from Tuesday at 1.98 million won, having opened 0.90 percent lower before briefly rising 0.20 percent. SK hynix was trading down 0.54 percent at 1.21 million won, following a similar pattern — opening lower, briefly turning positive, but currently sitting in slight negative territory.

Among top market-capitalization stocks, LG Energy Solution (up 1.36 percent), Samsung Life Insurance (up 0.61 percent) and Celltrion (up 2.96 percent) were advancing, while SK Square (down 0.53 percent), Samsung Biologics (down 0.48 percent) and Samsung Electro-Mechanics (down 0.57 percent) were in the red.

The Kosdaq was gaining ground. The index opened up 0.87 points, or 0.13 percent, at 668.48 and extended its advance, at one point surging as much as 2.98 percent to 687.49. On the Kosdaq, foreign investors and institutions were net buyers of 25.2 billion won and 3.1 billion won, respectively, while individuals were net selling 28.4 billion won.

Many of the Kosdaq's top market-cap stocks were rising, including Alteogen (up 2.67 percent), Ecopro (up 5.84 percent) and Ecopro BM (up 5.70 percent). HLB (down 0.99 percent), Pearl Abyss (down 0.16 percent) and Padu (down 0.44 percent) were among those declining.


th5@heraldcorp.com