Stock Market's KOSPI Makes Preparations to Break Its Slump
KOSPI Declines for Third Consecutive Session as Global Markets Surge
The South Korean stock market, represented by the KOSPI, experienced a third consecutive day of decline on Tuesday, while global markets saw an upbeat trend. The KOSPI finished at 3,189.91, losing 16.86 points or 0.53 percent.
In contrast, the Dow Jones Industrial Average, the NASDAQ Composite, and the S&P 500 all closed at record highs on Wall Street. The Dow surged 483.52 points or 1.10 percent, the NASDAQ rallied 296.50 points or 1.39 percent, and the S&P 500 climbed 72.31 points or 1.13 percent.
Trading on the KOSPI was 369.6 million shares worth 10.05 trillion won. Among the major Korean companies, Samsung Electronics perked 0.14 percent, while Samsung SDI tumbled 1.78 percent. SK Innovation retreated 1.30 percent, POSCO Holdings dipped 0.16 percent, and SK Telecom rose 0.36 percent.
In the automotive sector, KEPCO skidded 1.15 percent, Hyundai Mobis added 0.68 percent, Hyundai Motor gained 0.24 percent, and Kia Motors was up 0.20 percent. LG Electronics dropped 0.91 percent, SK Hynix improved 0.75 percent, LG Chem sank 0.72 percent, and Lotte Chemical tanked 2.28 percent.
Financial stocks also saw mixed results, with Shinhan Financial collecting 0.86 percent, KB Financial climbing 1.24 percent, and Hana Financial strengthening 1.18 percent.
Meanwhile, the global forecast for the Asian markets is upbeat on an improved outlook for interest rates. Traders believe the faster core price growth increases the chances the Federal Reserve will lower interest rates next month. However, current predictions for U.S. interest rates following the Labor Department's July consumer price inflation report indicate the Federal Reserve is likely to hold rates steady through August with no immediate cut, but a potential gradual rate-cutting cycle might begin later, possibly in late 2025 or early 2026.
CME Group's FedWatch Tool indicates a 94.4 percent chance the Federal Reserve will cut rates by a quarter point in September. The Fed appears cautious, prioritizing inflation reduction before lowering rates, especially given moderate job market signals from July.
In the commodities market, crude oil prices slumped on Tuesday ahead of an upcoming meeting between the U.S. and Russian presidents. West Texas Intermediate crude for September delivery was down $0.88 or 1.38 percent at $63.08 per barrel on Tuesday.
There were 547 decliners and 343 gainers in the KOSPI on Tuesday, but no specific comments or feedback were mentioned regarding these stocks. Naver was unchanged on Tuesday.
The decline in the KOSPI, despite global markets surging, may be indicative of challenges in the South Korean business sector. In the finance industry, the Federal Reserve's potential gradual rate-cutting cycle might impact local financial stocks in the near future. Moreover, technology companies like Samsung Electronics and LG Electronics experienced varying performance, with Samsung Electronics slightly increasing while LG Electronics declined.
