The Kospi index is displayed on a status board at Hana Bank’s dealing room in Jung-gu, Seoul, on Nov. 18. The Kospi closed at 6,869.83, down 108.11 points, or 1.55%, from the previous trading day. Yonhap News
[[B1]] The KOSPI swung through a roller-coaster session, breaking above 7,200 during the day before sliding into the 6,800 range. External headwinds — inflation concerns from rising oil prices, higher global bond yields and a slowing Chinese economy — combined with heavy institutional selling to drag the index lower.
[[B2]] The KOSPI opened at 7,127.77, up 2.15% from the previous session, and closed at 6,869.83, down 0.55%, the Korea Exchange said on the 18th. Early gains in semiconductor stocks pushed the index to 7,216.62, above the 7,200 mark, but it gave back all of those gains in the afternoon and turned lower.
[[B3]] The KOSPI had hovered in the 5,000-to-6,000 range after reaching 7,000 on the 23rd of last month. It climbed to around 6,290 on the 10th of this month and rose for five straight sessions to recover the 6,900 level, only to fail again to retake 7,000 on the day.
[[B4]] Heavy institutional selling weighed on the index. On the main board, institutions were net sellers of more than 780 billion won ($579 million). Retail investors and foreigners were net buyers of more than 730 billion won and 90 billion won, respectively.
[[B5]] Most top market-cap stocks were also weak. Samsung Electronics (005930.KS) fell more than 2% from the previous session, and other semiconductor-related shares including Samsung Electronics preferred stock, SK Square (402340.KS) and Samsung Electro-Mechanics (009150.KS) also lagged. Hyundai Motor (005380.KS), LG Energy Solution (373220.KS), Samsung Biologics (207940.KS), Hanwha Aerospace (012450.KS), Kia (000270.KS) and HD Hyundai Heavy Industries (329180.KS) also declined.
[[B6]] Rising oil prices, higher global bond yields and a slowing Chinese economy were cited as the causes of the market’s fall. On the New York Mercantile Exchange, West Texas Intermediate (WTI) futures rose 2.55% from the prior session to $84.50 a barrel on the 17th. Brent crude futures also climbed 2.65% to $90.87, moving back above $90. Stalled talks between the United States and Iran and geopolitical tensions in the Middle East pushed prices higher.
[[B7]] As the oil rally revived inflation concerns, bond yields also jumped. The yield on newly issued 10-year Japanese government bonds rose 0.025 percentage point from the previous session to 2.945%, the highest level in about 30 years, since September 1996.
[[B8]] China’s slowing economy also dampened sentiment. China’s industrial output in July rose 4.5% from a year earlier, falling short of the market forecast of 5.0%. Retail sales rose just 0.6%, well below the 1.5% forecast.
[[B9]] “The oil-price rise tied to the U.S.-Iran issue, weakness in Japanese stocks on higher Japanese government bond yields, and a decline in Chinese stocks all combined to expand profit-taking,” said Seo Sang-young, an analyst at Mirae Asset Securities. “In the end, bond yields and worries about the Chinese economy were the main factors.”
[[B10]] The KOSDAQ also fell for the first time in six sessions. It closed at 834.20, down 3.52% from the previous session. Institutions were net sellers of 416.5 billion won, while foreigners and retail investors were net buyers of 398.2 billion won and 36.7 billion won, respectively. Alteogen (196170.KQ), Ecopro (086520.KQ) and Ecopro BM (247540.KQ) each tumbled more than 5%, while Rainbow Robotics, Wonik IPS and Leeno Industrial also dropped sharply.
