Having opened at 2,008.44, the index fluctuated around the 2,000 mark throughout the day, once crashing below the threshold for the first time since July 9. After approximately 1 p.m., the KOSPI rebounded and stayed above the 2,000 mark.

The heavyweight auto shares helped the KOSPI rebound. At closing, Hyundai Motor shares went up 1.45 percent and Kia Motors’ 0.12 percent from a trading session earlier. Samsung Electronics slightly rose by 0.44 percent.

Meanwhile, the shares of construction companies, shipbuilders, steelmakers and other economy-sensitive industries went down. GS Construction and Daewoo Construction shares went down 4.95 percent and 1.08 percent, respectively. Daewoo Shipbuilding and Marine Engineering plummeted 5.17 percent, Hyundai Heavy Industries 3.21 percent, Samsung Heavy Industries 3.97 percent. Machinery, Chemicals and textile shares also went down on low demand.

The fluctuation was led by strong foreign and institutional selling, a sign that more investors are anticipating the U.S. Federal Reserve’s possible key rate hike in September, which could be an earlier-than-expected tighter monetary policy.

The fall came as foreigners and institutional investors net sold 12.9 billion won ($11.1 million) and 43.8 billion won, respectively.

Strong net selling in Korea and emerging markets was fueled by the latest U.S. Bureau of Labor Statistics report of Aug. 7, which showed moderate recovery of the economy. According to the report, the U.S. unemployment rate remained unchanged at 5.30 percent in July from the previous month, indicating that the economy may have moved on from its lowest point.

The U.S. Fed’s looming rate hike decision is being closely watched as it will affect the exchange rate of the greenback. Such changes affect the value of products and financial instruments of other countries, ultimately affecting international trade and governments’ economic and monetary policies.

In addition to the U.S. key rate forecast, dwarfing domestic consumption and low corporate performance in the second quarter also negatively affected the benchmark KOSPI.

By Chung Joo-won (joowonc@heraldcorp.com)