Why did KOSPI and KOSDAQ fall on July 16, 2025?

KOSPI and KOSDAQ fell due to strong selling pressure from foreign and institutional investors, combined with rising exchange rates, higher U.S. bond yields, and concerns over inflation and tariffs.

Which companies were affected the most by the market decline?

Financial companies like Mirae Asset Securities, Woori Financial Group, and KB Financial saw sharp declines. SK hynix and Hyundai Motor also fell, while Samsung Biologics and Alteogen performed better.

What economic factors are affecting South Korea’s stock market?

Key factors include a rising Korean won to U.S. dollar exchange rate, increased 10-year U.S. Treasury bond yields, uncertainty over U.S. tariffs, and fading expectations of a U.S. Fed rate cut.

Did any stocks perform well despite the market drop?

Yes, Samsung Electronics, Alteogen, and parts suppliers like TOPTEC, Fine M-Tec, and Duksan Neolux gained due to positive news and tech developments.

What is the outlook for the Korean stock market?

The short-term outlook remains cautious due to external risks like inflation, tariffs, and rate decisions. Selective buying in tech and equipment sectors may continue.

Foreign Selling Pressures Weigh on KOSPI & KOSDAQ as Samsung, Alteogen Struggle Despite Positive Triggers

foreign institutional selling impact on Korean stock market

The South Korean stock markets KOSPI and KOSDAQ faced a decline on July 16, 2025, as foreign and institutional investors continued heavy selling. Despite strong individual performances by Samsung Electronics and Alteogen, the broader market fell under pressure due to macroeconomic concerns.

KOSPI and KOSDAQ Close Lower

On Tuesday, the KOSPI index dropped by 28.9 points (0.9%), ending at 3,186.38. This fall came after briefly reclaiming the 3,200 level for the first time in nearly four years. Meanwhile, the KOSDAQ index also slipped slightly by 0.08% to 812.23.

Despite recent gains in big-name stocks, selling pressure from foreign and institutional investors pulled the markets downward.

Samsung & Alteogen: Bright Spots Amid Market Gloom

· Samsung Electronics continued its rally after news that NVIDIA received approval to resume AI chip exports to China.

· Alteogen soared to an all-time high during the day, following the announcement that its ATL B4 drug patent was registered in the U.S.

Still, these gains weren’t enough to lift the overall market. Broader sell-offs across sectors overwhelmed isolated rallies.

Who’s Selling and Why?

In the KOSPI market,

· Institutions sold stocks worth ₹613.7 billion won,

· Foreigners offloaded about ₹76.1 billion won.

In the KOSDAQ,

· Foreign sales totaled ₹113.8 billion won,

· Institutions sold ₹67.5 billion won.

Much of this selling came from program trading, particularly non-arbitrage transactions. These types of trades usually affect multiple large-cap stocks at once, amplifying the impact across the market.

Economic Indicators Fueling Nervousness

Several global signals increased investor caution:

· The Korean won weakened against the U.S. dollar, settling at 1,385.7 won, up 5.5 won from the previous session.

· The 10-year U.S. Treasury yield climbed near 4.5%, signaling reduced appetite for risk.

· Concerns over inflation and tariffs, particularly from potential policies under Donald Trump, added to the pressure.

Even though the U.S. Consumer Price Index (CPI) met expectations, rising commodity prices and tariff uncertainties worried investors.

US Fed Rate Cut Hopes Fading

Recent market data shows that expectations for a rate cut in September by the U.S. Federal Reserve have declined:

· The CME FedWatch Tool suggests a 54% chance of a rate cut, down from 70% a week ago.

· The chance of a rate freeze rose to 46%, reflecting increasing doubt in economic easing.

This shift in expectations affects global investor sentiment, especially in emerging markets like South Korea.

What’s Next for the Market?

Analysts suggest that profit-taking was a major theme after KOSPI’s recent high.
According to Lee Kyung-min from DAISHIN Securities, investor psychology is shifting:

“The recent high in the KOSPI likely triggered profit-booking. Investors are now evaluating whether tariff effects on prices will be short-lived or longer-term.”

Major Stock Movements: Winners & Losers

Falling Stocks in KOSPI:

· SK hynix

· LG Energy Solution

· Hyundai Motor

· Mirae Asset Securities: Down over 7%

· Woori Financial Group, KB Financial: Dropped over 5%

Gainers in KOSPI:

· Samsung Biologics

· Hanwha Aerospace

· NAVER

Top Losers in KOSDAQ:

· ECOPRO BM

· Ecopro

· PharmaResearch

Top Gainers in KOSDAQ:

· Peptron

· Rainbow Robotics

· LEENO Industrial

Sector Watch: Financials Fall, Tech & Parts Rise

Weak Sectors:

· Banking

· Insurance

· Securities

These sectors, which recently showed momentum, corrected sharply. Investors likely exited due to macroeconomic uncertainties.

Strong Sectors:

· Parts and Equipment Manufacturers:

o TOPTEC hit upper circuit after news it’s supplying prismatic battery assembly machines to SK On.

o Fine M-Tec and Duksan Neolux also gained due to their linkage with Apple’s rumored foldable iPhone.

Takeaway for Investors

The South Korean stock market is navigating heavy foreign institutional selling, combined with rising U.S. bond yields, a weaker won, and tariff fears. While companies like Samsung and Alteogen offer hope, the broader sentiment remains cautious.

Short-term volatility may continue until there’s clarity on:

· U.S. inflation trends

· Federal Reserve policy

· Trade and tariff developments

For now, it’s a market for patient investors and those looking for value in selective sectors.