The structural weakness of the Korean stock market, which continued to decline as foreigners sold and individuals bought under the inflationary pressure from Europe, has been fixed.
In the securities market on the 9th, foreign investors net sold 949.8 billion won and net sold for five consecutive days from the 2nd to the 5th consecutive day.
Domestic securities companies and the media reported on the 7th, the beginning of the week, "The US stock market, which had succeeded in rebounding after stopping its decline for the seventh week in a row on anticipation of an inflation peak-out, showed a slight decline in the second half of the week due to strong employment and concerns about austerity." In the stock market, institutions and individuals net sold 592 billion won and 829.8 billion won each, while foreigners supported the domestic stock market with a net purchase of 1.3 trillion won.”
The Bank of Korea announced on the 9th that foreign stock investment was a net outflow of 1.28 billion dollars (1.6 trillion won) in May and a net outflow from -4.26 billion dollars in April to consecutive net outflows from February.
The credit default swap (CDS) premium of the five-year Korean government bonds (foreign exchange equalization fund bonds) rises, and the 44bps in May rose 11bps from April and the highest since July 2018 (45bps).
The Bank of Korea confirmed the increase in the CDS premium on the 9th, and the won/dollar exchange rate fluctuation of 5.7 won in May rose from 5.1 won in April.
Just before (9th), the New York Dow Jones Industrial Average fell 350 points (1.1%). The S&P 500 and Nasdaq Composite fell 1.3% and 2.1%, respectively.
The Bank of Japan announced on the 10th that the corporate commodity price index (cgpi) in May was 112.8, up 9.1% from the same period of the previous year, the 15th consecutive month of increase.
On the 30th of last month, when Citi Securities announced a sell target for Samsung SDI, which Samsung Group invested in the US, from 930,000 won to 480,000 won. At 547,000 won, it rose by 11,000 won from the previous day, but then declined.
On the occasion of the Korea-US summit, Samsung SDI and Stellantis announced the establishment of a joint venture for electric vehicle batteries in Indiana, USA, raising expectations for a rise in the domestic stock market.
Foreigners net sold 32 trillion won in the Korean stock market from the beginning of this year to the 8th.
Since the early 2000s, when the Chinese economy was growing rapidly, the Korean stock market was raised by foreigners and used as a warehouse to secure large amounts of cash when necessary.
The Korean government and securities companies continue to pressure domestic investors to buy at the time of foreign selling, and set PER (Price to Earnings Ratio) and PBR (Price to Net Asset Ratio) to ensure foreign selling profits, leading to a 'Korean exception' pattern in international information. continued
The KOSDAQ index, which rose on the 9th, rose 2.23p (0.25%), with individuals and institutions net buying 98.1 billion won and 21.3 billion won, respectively, and foreigners net selling 120.4 billion won.
The European Central Bank (ECB) said on the 9th, "It plans to raise the key interest rate by 0.25 percentage point at the monetary policy meeting in July, and plans to raise the key interest rate again in September." An increase in the width will also be appropriate.”
The ECB raised its inflation forecast on the same day to 6.8% this year, 3.5% in 2023, and 2.1% in 2024, while lowering its economic growth forecast to 2.8% this year and 2.1% in 2023.
The ECB announced, “Inflationary pressure has widened and deepened, so it has raised its inflation forecast. It is expected that the inflation rate will remain at a high level for a considerable period of time,” he said.
On the 10th, Lee Chang-yong, governor of the Bank of Korea, said, “We started to normalize monetary policy earlier than central banks in other countries, but at this point in time when central banks of major countries are increasing the speed and intensity of normalization, we are no longer preemptively adjusting the degree of easing. It's hard to see," he said, 'after an interest rate hike'.
Korean securities firms have been encouraging the stock market to rise by raising expectations for the US Consumer Price Index (CPI), which is scheduled to be released on the 10th.
The Bank of Korea confirmed on the 10th that the current account deficit in April was $80 million, and it started a twin deficit with a deficit.