KOSPI Fails to Break 7000 Barrier as Trading Volume Plummets

The South Korean stock market, the KOSPI, ended the week below the crucial 7000-point level, experiencing a significant decline of 1.79% on the 28th. This marks a failure to recover the milestone after a brief surge to 6996.12 the previous day. The index has largely remained within the 6000-point range throughout July, despite brief intraday breaches above 7000 on the 14th and 18th.

The lack of a clear market direction is attributed, in part, to continued selling by foreign investors. Their net sales have surpassed 10.4 trillion won this month, exceeding the 9.9 trillion won sold in June. This outflow has particularly affected large-cap stocks, with SK Hynix, Samsung Electro-Mechanics, and Samsung Electronics' preferred shares being among the top sold items.

On the 28th, SK Hynix and Samsung Electronics saw their stock prices drop by 4.45% and 3.38% respectively, dragging down the overall index. This decline occurred despite a strong performance in the U.S. market, buoyed by Nvidia's positive earnings. Analysts point to policy uncertainties surrounding the Trump administration as a burden on the domestic market's investor sentiment. Additionally, anticipation of the Jackson Hole meeting has contributed to lingering caution among investors.

The prolonged sideways trading has also led to a significant cooling of investment enthusiasm. The daily trading volume on the KOSPI has plummeted to 19 trillion won, a stark contrast to the 80 trillion won recorded on May 29th. The average daily trading volume for July stands at 25.7 trillion won, the lowest for the year, down from approximately 50 trillion won in May and June.

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The U.S. stock market showed strength driven by Nvidia's strong performance, but in the domestic stock market, policy uncertainties surrounding the Trump administration acted as a burden, leading to sluggish investor sentiment. There is also lingering caution as the Jackson Hole meeting is scheduled for tonight.