Hints of an End to Rate Cuts... KOSPI Fails to Reclaim 4,000 Mark [fn Closing Market]

[Financial News] The Korea Composite Stock Price Index (KOSPI) closed at the 3,980 level, buoyed by net buying from foreign and institutional investors. Although the index surged more than 1% in early trading, it gave up some gains in the afternoon following a hawkish decision by the Monetary Policy Board of the Bank of Korea (BOK). According to the Korea Exchange on the 27th, the KOSPI finished at 3,986.91, up 26.04 points (0.66%) from the previous session. The index opened at 3,989.45, up 0.72%, and climbed to the 4,023 level in early trading. However, as the day progressed, the upward momentum faded and the index ended at the 3,980 level.
In the KOSPI market, foreign investors and institutions bought 156 billion KRW and 452.5 billion KRW worth of shares, respectively. Only individual investors showed a net selling position of 613.3 billion KRW.
By sector, metals (3.78%), entertainment & culture (2.49%), electrical & electronics (1.58%), and food, beverage & tobacco (1.06%) showed strong performances. In contrast, IT services (-2.17%), electricity & gas (-1.20%), and securities (-0.90%) declined.
Among the top market cap stocks, Samsung Electronics (0.49%), SK hynix (4.20%), and LG Energy Solution (0.46%) rose. On the other hand, Hyundai Motor (-0.19%), HD Hyundai Heavy Industries (-0.54%), and KB Financial Group (-0.80%) fell.
Overnight, U.S. stock markets closed higher as risk appetite returned on expectations of a possible change in the Fed chair to a pro-Trump figure favoring rate cuts, as well as rallies in AI technology and semiconductor stocks.
The domestic market managed to reclaim the 4,000 level in the morning, supported by foreign buying. However, after the Bank of Korea's Monetary Policy Board announced its decision to keep the base rate unchanged at 2.50% per annum, interpretations that this signaled an effective end to the rate-cutting stance led to a narrowing of gains.
In fact, there were some changes in the statement from the Monetary Policy Board's monetary policy direction meeting. The Board stated, "While leaving open the possibility of a rate cut, we will closely monitor changes in domestic and external policy conditions, growth and inflation trends, and financial stability, and determine whether and when to make further rate cuts accordingly."
Since starting its monetary easing policy with a rate cut last October, the Board had consistently included language in its statements about maintaining a rate-cutting stance while monitoring policy conditions, inflation, and financial stability to determine the timing and pace of further cuts.
However, this time, the 'stance of rate cuts' was replaced with 'possibility,' and the 'timing' of further cuts was changed to 'whether' further cuts would occur. This leaves room for interpretation that additional rate cuts may not happen depending on future financial conditions.
Jungeun Lim, a researcher at KB Securities, noted, "Foreign and institutional investors continued their net buying, supporting the index, but after the Monetary Policy Board's decision to keep rates unchanged, the index gave back some gains as the outcome was more hawkish than expected. While semiconductor, materials & components, and robotics-related stocks performed strongly, most sectors ended flat, indicating a pause in momentum."
On this day, the KOSDAQ Index closed at 880.06, up 2.74 points (0.31%) from the previous session. The index opened at 879.44, up 0.24%.

nodelay@fnnews.com Park Ji-yeon Reporter