DAILY MARKET NOTE / 17 SEP 2026

Foreign Selling, Day Seven;
A Broader Market

KOSPI -0.04% · KOSDAQ +0.76% · foreign net selling extended to a seventh consecutive sessionThe year-end rate path—not the hike itself—along with 5%-plus long yields and a stronger dollar remained a drag before the open · the market still opened +0.91%454 stocks advanced versus 398 declined · while the index went nowhere, the market beneath it broadenedSupport for the index came from outside semiconductors · shipbuilding and defense rose together

The hike mattered less than the path that followed.

MARKET PATH / 01

Two highs—just after the open and around 13:30; the selloff came after 14:00

When did direction change, and what was working at the time?

KOSPI · 09:00~15:30Opened at 6,779.02 → first-bar high 6,795.53 → renewed rise around 13:30 → intraday low 6,697.85 around 14:40 → closed at 6,715.41

OPEN6,779.02+0.91%

HIGH6,795.53+1.15%

LOW6,697.85-0.30%

CLOSE6,715.41-0.04%

THE READ

The Fed decision and the subsequent rates-and-dollar reaction were all known before Korea opened · even so, the market opened higher · the hike itself, at least, did not trigger an opening shockThe index moved above the prior close twice and failed to hold it both times · once in the morning and once around 13:30The day's decline was concentrated in a single stretch after 14:00 · the preceding five hours were more repetition than directionThe late drag came from the top of the market-cap table · foreign net selling at the close was concentrated in the same large capsToday's flat close did not mean the whole market stood still · weakness at the top was offset by strength elsewhere

OPEN · MORNING

Opened nearly 1% higher; the day's high came within the first bar

The market opened 61.05 points above the prior close · the intraday high came within the first five-minute bar, through 09:05It then pulled back immediately, falling below the prior close around 09:30A rebound around 10:10 faded; by around 11:20 the index was only 8.65 points above the prior close

AFTERNOON

A renewed rise after noon, with a second high around 13:30

Direction turned from the midday low, reaching 6,766.85 around 13:10Around 13:30, the index reached a second high close to the day's peakDirection reversed again after 14:00 · most of the day's decline came in this stretch · the strong groups outside the index leaders held up through the same period

The day's low came around 14:40, followed by a modest rebound into the close

The intraday low came around 14:40 · the close finished 17.56 points above it and 80.12 points below the highFrom the low to the close, the index moved in a narrow band around 6,710KOSDAQ finished +0.76%, opposite in sign to KOSPI · KOSPI trading value was KRW 15.5413tn, 73.2% of its five-session average

Path read from the KRX regular-session KOSPI five-minute chart · line vertices are values read from five-minute bars; only the open, high, low and close are official closing figures · the intraday high occurred in the first bar through 09:05, and the low in the bar around 14:40.

WHY / 02

What weighed more than the hike was the rate path that followed

Only the catalysts that actually explain the day's direction

The year-end rate path mattered more than the hike itself · 5%-plus long yields and a stronger dollar were already a drag before the open

The Fed raised the policy rate by 25 bp, from 3.50–3.75% to 3.75–4.00% · all 12 members voted in favor year-end median 4.1% · 16 of 18 participants projected at least one more hike this year · 12 projected one, 4 projected two, and 2 projected no further increaseThe hike and the resulting rates-and-dollar reaction were all known before Korea opened · even so, the market opened +0.91% · the hike itself, at least, did not trigger an opening shockThe remaining pressure came from the U.S. 10-year yield moving back above 5% and the reclaiming 100 · USD/KRW was quoted by Hana Bank at the 15:30 at KRW 1,381.7, up KRW 12.8Oil moved the other way, cushioning the inflation path · on Sep. 16 local time, WTI -3.5% · Brent -2.89%

3.75~4.00%Fed policy rate · 25 bp hike

Show evidence

Chair Warsh: “Inflation is too high, and has been for too long.”

U.S. session, Sep. 16 local time · Dow 51,461.90 -1.21% · S&P 500 7,551.81 -0.45% · Nasdaq 25,978.42 -0.01%

In the same session, the rose 0.63% · Intel +4% · NVIDIA +0.8% · U.S. semiconductors moved opposite the broader indices

U.S. 10-year close 5.006% · traded above 5.02% intraday, the highest since July 2007 · 2-year yield rose 6.4 bp to 4.727%

U.S. Dollar Index recovered 100 at 100.31 · first time since Aug. 13

U.S. August retail sales · actual +1.2% m/m · consensus +0.7% · July revised to -0.5% · released five and a half hours before the Fed decision

The main drivers of the shipbuilding rebound were lower price pressure after a sharp short-term fall and still-solid order backlogs

KRX Shipbuilding TOP10 had fallen for two straight sessions through the prior day, easing near-term valuation pressureBrokerages attributed the move to bargain buying, citing solid order backlogs and improving earningsHD Hyundai Heavy Industries is assessed to have already exceeded its annual order targets for merchant ships and engines, with additional LNG-carrier orders still possible (IBK Investment & Securities)KOSPI Transportation Equipment & Parts, which includes shipbuilders, had far more advancers than decliners within the sector

+5.39%KRX Shipbuilding TOP10 · all 10 constituents advanced

Show evidence

Individual stocks · HD Hyundai Heavy Industries +6.58% · Samsung Heavy Industries, HD Korea Shipbuilding & Offshore Engineering and Hanwha Ocean also advanced

KRX Shipbuilding TOP10 turned higher for the first time in three sessions after -5.48% on Sep. 15 and -1.89% on Sep. 16

KOSPI Transportation Equipment & Parts +2.40% · 45 advancers versus 12 decliners among 65 stocks

Same-direction sectors · KOSPI Machinery & Equipment +1.97% · Transportation & Storage +1.77% · Metals +0.92%

Leading shipbuilding and defense names also ranked among retail's top net sells, indicating profit-taking alongside the rally

MONEY / 03

Foreign selling concentrated at the top of the market-cap table

Who moved today's index

FOREIGN · KOSPI CASH

-KRW 2.277tn

Foreign net selling extended to seven consecutive sessions · the top two net sells were SK hynix and Samsung Electronics · SK hynix also ranked No. 1 in the stock-level flow dataThe same foreign investors ranked shipbuilding, defense and power-equipment names among their top net buys, making this different from across-the-board sellingThe stocks sold and bought moved in opposite directions · this was not a uniform selloff across the market

Top two net sellsSK hynix · Samsung Electronics

Top net buysHyundai Movex · SK Square · Samsung Heavy Industries

Different basis ·

+KRW 1.6998tn

Cumulative close figure from market reporting that combines KRX and NXT · the three investor groups above are KRX regular-session figures, so the bases differ and should not be summed or used to calculate percentage shares · Other corporations have posted at least KRW 1.6tn for three straight sessions; ongoing treasury-share purchases account for part of that, but the entire category should not be treated as buybacks

Program trading · detailed flows

KOSPI total-KRW 1.8894tn

program-KRW 2.0132tn

Arbitrage program+KRW 123.8bn

KOSPI trading valueKRW 15.5413tn

Program net selling widened from -KRW 1.269tn in the prior session · arbitrage and non-arbitrage moved in opposite directions
Program trading classifies the order method; investor-type data classifies who traded · because the bases differ, one should not be read as the offsetting side of the other
KOSDAQ by investor · institutions net bought KRW 45bn · retail net sold KRW 25bn and foreigners KRW 34bn · all three were only in the tens of billions of won
Stock-level flows vary by dataset, so only rankings and concentration are shown · Samsung Heavy Industries, LIG Defense & Aerospace, Hyosung Heavy Industries, Hanwha Systems and Korea Aerospace Industries all ranked among foreigners' top net buys
Institutional top net buys also included HD Hyundai Heavy Industries, Hanwha Engine, Samsung Heavy Industries and Hanwha Aerospace · buying in shipbuilding and defense was shared by both investor groups
KOSPI 200 · foreigners net bought while institutions and retail moved the other way · cash and futures pointed in different directions within the same day · only the direction is shown; it is not broadened into a bullish-bet interpretation
Five-session cumulative flow · Sep. 11–17 KOSPI: foreigners -KRW 11.111tn · institutions -KRW 1.931tn · retail +KRW 4.899tn · same KRX basis as the headline totals
· KOSPI short-selling value was KRW 1.3705tn, 6.75% of trading value · SK hynix ranked No. 1 at KRW 498.5bn, 8.54% of that stock's turnover · the same stock also ranked No. 1 in foreign net selling
KOSPI volume 197.21mn shares · trading value was 73.2% of the five-session average

SECTOR / 04

Strong · weak

Today's distribution of strength, not just a ranking

Strength had two pillars—shipbuilding and defense—while semiconductors, which had carried the index in the prior session, moved the other way.Seventeen of 24 KOSPI sectors rose · the distribution was the opposite of the prior session, when strength was concentrated in semiconductorsThe shipbuilding and defense theme indices each had all 10 constituents higher · the rise was broad within the groups, not just at the index levelKOSPI Electrical & Electronics had 32 advancers versus 41 decliners among 84 stocks · weakness was broader within the sector as well

STRONG

KRX K-AI Defense TOP5+Theme+5.75%

KRX Shipbuilding TOP10Theme+5.39%

Transportation Equipment & PartsKOSPI sector+2.40%

Machinery & EquipmentKOSPI sector+1.97%

WEAK

KRX K-AI Semiconductor TOP2+Theme-1.62%

Entertainment & CultureKOSPI sector-1.49%

Electrical & ElectronicsKOSPI sector-0.57%

KRX Semiconductor Top 15Theme-0.40%

Sector evidence

Among 46 KRX industry indices, 35 rose, 1 was flat and 10 fell · 17 of 24 KOSPI sectors rose · 18 of 22 KOSDAQ sectors rose
Among 39 theme indices, 21 rose and 18 fell · KRX-Akros AI Power Infrastructure +1.37% · KRX K-AI Biotech KOSDAQ +1.70%
Breadth within strong sectors · KOSPI Transportation Equipment & Parts: 45 up vs 12 down among 65 stocks · Machinery & Equipment: 19 vs 9 among 33 · Transportation & Storage: 15 vs 10 among 26
Breadth within weak sectors · KOSPI Electrical & Electronics: 32 up vs 41 down among 84 stocks · Entertainment & Culture: 4 vs 8 among 13
Seven of the 10 largest stocks by market cap fell · the three advancers were KB Financial +1.41%, Samsung C&T +0.57% and Hyundai Motor +0.28% · Samsung Electro-Mechanics -3.69% · SK Square -1.18% · Samsung Biologics -0.92% · SK hynix -0.80%
KOSDAQ Entertainment & Culture fell 2.31%, the steepest sector decline, but only 15 of 55 stocks rose versus 33 down and no common day-specific catalyst was identified, so it is excluded from the strong/weak list
Advancers and decliners · KOSPI: 1 limit-up, 453 up, 62 unchanged, 398 down, 0 limit-down · KOSDAQ: 6 limit-up, 945 up, 123 unchanged, 662 down, 0 limit-down
Advancing-stock ratio · KOSPI 49.7% (454/914) · KOSDAQ 54.8% (951/1,736) · numerator = advancers + limit-up stocks; denominator = limit-up + up + unchanged + down + limit-down
Sector returns are market-cap-weighted index returns, not net inflow amounts by sector

CHANGE / 05

Answers to yesterday's questions

Checking yesterday's conditions against today's market

YESTERDAY → TODAY

After the Fed decision, the U.S. 10-year yield closed above 5% · the rationale behind the prior afternoon's selloff remained in placeForeign net selling in KOSPI did not stop, extending to a seventh session · retail was a net buyer market-wide, but took profits in today's strong shipbuilding and defense namesThe advancing-stock ratio remained below half, but widened from 33.1% to 49.7% · the prior-session structure, in which semiconductors alone carried the index, changed

U.S. 10-year close

4.996%

→

5.006%

Consecutive sessions of foreign KOSPI net selling

6 sessions

→

7 sessions

KOSPI advancing-stock ratio

33.1%

→

49.7%

CATALYST / 06

UAE integrated air-defense network · expectations priced at the Heads of Terms stage

The single event the market actually priced today

Hanwha Systems · UAE EDGE agreement

+12.65%

Agreement to build a UAE integrated air-defense network centered on long- and medium-range surface-to-air guided weapons

WHAT · Decision

Hanwha Systems and UAE state-owned defense company EDGE Group signed for an The scope is a multilayered air-defense network centered on long- and medium-range surface-to-air guided-weapon systems, linked with counter-drone systems and short-range air defenseSigned by Hanwha Systems' Yang Ki-won and EDGE Group CEO Hamad Al Marar

TERMS · Transaction terms

This is a Heads of Terms stage, not a final contract · value and schedule were not disclosedSubject to required government approvals and consultations, the parties will review establishing a local joint venture and plans for production and business operations

SHAREHOLDER · Shareholder impact (interpretation)

What was priced today was not a confirmed order, but a prospective position in a Middle East integrated air-defense programGovernment approvals and a final contract still stand between the agreement and earnings · expectations at the Heads of Terms stage were reflected in the share price first

MARKET · Market reaction

Hanwha Systems KRW 77,500 · opened at KRW 68,900 and reached KRW 78,700 · volume 2,038,485 sharesKRX K-AI Defense TOP5+ +5.75%, with all 10 constituents higher · Hanwha Aerospace +3.98%Foreigners ranked Hanwha Systems, Korea Aerospace Industries and LIG Defense & Aerospace among their top net buys

NEXT / 07

What to watch next session

Conditions that can actually be scored, not probabilities

Does foreign net selling in KOSPI extend to an eighth session?

It has now run for seven consecutive sessions, with today's amount above KRW 2tn · score only whether the sign and streak continue or break; the link to rates is checked separately in 02

Does the U.S. 10-year yield post a second close above 5%?

Sep. 16 local close: 5.006% · score the next close only · a move back below 5% would lower long-rate pressure by one step · persistence of foreign cash selling is checked separately in 01

Do the shipbuilding and defense rallies carry into the next session?

Today KRX Shipbuilding TOP10 +5.39% and KRX K-AI Defense TOP5+ +5.75%, with every constituent in both themes higher · the same names ranked among retail's top net sells, so score the next session by the sign of the two theme indices

A day when shipbuilding and defense filled the gap left by falling mega-caps.

Sources · data basis

Reference date: 2026.09.17 · indices, sectors, themes and individual-stock closes are based on the KRX regular session, 09:00–15:30
Information cutoff: Sep. 17, 20:00 KST · indicator releases and overseas intraday values published after that time are not included
Indices · KOSPI open 6,779.02 · high 6,795.53 · low 6,697.85 · close 6,715.41 are official regular-session closing figures · KOSDAQ 822.18
Intraday path · read from the KRX regular-session KOSPI five-minute chart · line vertices are values read from five-minute bars; only the open, high, low and close are official closing figures · 6,726.62 around 11:20 and 6,766.85 around 13:10 are cited from market reports
Investor totals · KRX regular-session closing tally, confirmed at 15:38 · KOSPI foreigners -KRW 2.277tn · institutions +KRW 159.0bn · retail +KRW 414.0bn · Other corporations are not included in this tally, and no residual is back-calculated from the three values · Other corporations +KRW 1.6998tn is a KRX+NXT cumulative-close figure reported by the market, so it is not summed with or expressed as a share of the three values above · KOSDAQ institutions +KRW 45bn · retail -KRW 25bn · foreigners -KRW 34bn
Stock-level flows · KRX trading by investor type · because collection occurred after the regular-session close, only rankings and concentration are shown, not amounts
Program trading · KOSPI arbitrage +KRW 123.8bn · non-arbitrage -KRW 2.0132tn · total -KRW 1.8894tn · regular-session final tally confirmed at 15:37
Futures · KOSPI 200 futures by investor type were confirmed at 16:20 and only direction is shown · KOSPI 200 cash and futures closes have different end times, so they are excluded from directional comparison
Short selling · KOSPI short-selling value KRW 1.3705tn and 6.75% of trading value are based on the combined KRX+NXT regular market, so the denominator differs from KOSPI trading value
Turnover · KOSPI trading value KRW 15.5413tn · volume 197.21mn shares · 73.2% of the five-session average · KOSDAQ trading value KRW 5.6217tn · regular-session final tally confirmed at 15:32
Cumulative flows · the five sessions from Sep. 11 through 17 use confirmed KRX figures on the same basis as the headline totals
Market breadth · KRX counts of rising and falling stocks · limit-up stocks are counted separately from ordinary advancers · advancing-stock ratio numerator = advancers + limit-up; denominator = limit-up + advancers + unchanged + decliners + limit-down
Sectors and themes · KRX Index closing data for 46 industry indices and 39 theme indices · constituent counts of up/unchanged/down are from the same dataset
Prior domestic session · Sep. 16 KOSPI close 6,717.97 · 304 advancers, 578 decliners · advancing-stock ratio 33.1% · program trading -KRW 1.269tn · Other corporations +KRW 1.6572tn, based on the Sep. 16 published edition
Overseas · Dow 51,461.90 · S&P 500 7,551.81 · Nasdaq 25,978.42 are Sep. 16 local closes · Philadelphia Semiconductor Index +0.63% · Intel +4% · NVIDIA +0.8% are cited from reporting
Rates · U.S. 10-year close 5.006% is an in-house collected value (^TNX, Sep. 16 local close) on the same basis as prior-session 4.996% · the intraday move above 5.02%, and the 2-year at 4.727% up 6.4 bp, are cited from reporting
Fed · Sep. 15–16 local meeting · policy rate raised 25 bp from 3.50–3.75% to 3.75–4.00% · all 12 members voted in favor · dot-plot year-end median 4.1% · of 18 participants, 12 projected one more hike this year, 4 projected two and 2 projected no further increase · Chair Warsh's remarks are cited from reporting
Data · U.S. August retail sales were released Sep. 16 at 21:30 KST · actual +1.2% m/m · consensus +0.7% · July revised to -0.5%
Commodities and FX · WTI -3.5% · Brent -2.89% are cited from Sep. 16 local reporting · USD/KRW Hana Bank 15:30 reference rate KRW 1,381.7, up KRW 12.8 from the prior-session reference rate of KRW 1,368.90 · U.S. Dollar Index 100.31 is the Sep. 16 local close
Company · Heads of Terms between Hanwha Systems and UAE EDGE Group for an integrated air-defense network were reported Sep. 17 · it is an agreement-stage document, not a final contract, and value/schedule were not disclosed · local JV formation and production/business-operation plans remain under review · Hanwha Systems close KRW 77,500 · open KRW 68,900 · high KRW 78,700 · volume 2,038,485 shares are cited from closing reports
Shipbuilding · the assessment that HD Hyundai Heavy Industries has exceeded its annual order targets and still has additional LNG-carrier order potential is cited from IBK Investment & Securities · KRX Shipbuilding TOP10 -5.48% on Sep. 15 and -1.89% on Sep. 16 are based on the Sep. 16 published edition
Schedule · Korea August Producer Price Index (preliminary) is released by the Bank of Korea at 06:00 on Sep. 18 · Bank of Japan meets Sep. 17–18; official schedule lists the policy statement release time as TBD · governor's press conference at 15:30 KST

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