Kospi Briefly Falls Below 5,500, Then Trims Losses on Foreign and Institutional Buying

The Kospi fell below the 5,500 mark in early trading on October 26 before quickly trimming losses as foreign and institutional investors bought shares.

According to the Korea Exchange, the benchmark Kospi opened at 5,499.05, down 0.92% from the previous session. It later rebounded to 5,546.71 as of 9:10 a.m., narrowing its loss to 0.06%. Foreign investors were net buyers of 28.3 billion won, while institutions bought a net 7.8 billion won. Retail investors were net sellers of 42.8 billion won.

Among large-cap stocks, SK Hynix rose more than 2%. Samsung Electronics, SK Square and Samsung Electro-Mechanics were little changed. LG Energy Solution and Samsung SDI each fell more than 2%, while Hyundai Motor lost more than 1%. Hanwha Aerospace and Doosan Enerbility also traded lower.

By sector, insurance, electrical and electronics, and manufacturing posted modest gains. Metals, securities, chemicals, food and beverage, tobacco, and entertainment and culture shares declined. Among financial stocks, Samsung Life Insurance and Hana Financial Group each rose more than 1%.

The Federal Reserve's October Federal Open Market Committee meeting is a key variable for markets this week. Although September US consumer price index data came in above expectations, keeping inflation concerns alive, recent financial-market volatility and concerns over the credit risk of artificial intelligence infrastructure companies have also fueled views that the Fed could remain cautious on further tightening.

Han Ji-young, an analyst at Kiwoom Securities, said the focus at this meeting is less on whether the Fed leaves rates unchanged and more on what Chairman Kevin Warsh says about the future path of monetary policy. If the Fed maintains its position that it will not rush into another rate increase, uncertainty over the rate path could ease, Han said.

Earnings from major US technology companies are also set to shape investor sentiment. Amazon, Alphabet and Microsoft are scheduled to report later this week. Markets are watching whether heavier AI-related capital spending is translating into higher cloud revenue and improved cash flow.

In South Korea, investors are closely watching earnings releases and conference calls from Samsung Electronics and SK Hynix. Key points include demand and pricing outlooks for high-bandwidth memory, or HBM, and conventional DRAM, as well as supply changes stemming from capacity expansion. Whether semiconductor companies can sustain earnings growth through 2027 and 2028 could influence the direction of the domestic stock market.