South Korea’s main equity barometer had a steadfast first trading day this year due to sell-offs by foreign and institutional investors Monday.

The Kospi slightly rebounded to the 2,030 mark during the day with some rallies in large-cap shares after a brief fall in the morning.

Market bellwether Samsung Electronics and large-caps like SK hynix, Hyundai Motor, Hyundai Mobis, Naver and SK Telecom showed rallies during the day’s trading.

However, the index went downhill again due to falls in chemical and cosmetic shares along with growing worries about the fallout of the decision to deploy the missile defense system Terminal High Altitude Area Defense here.

LG Chem slid more than 3 percent on the news of the Chinese government excluding Korean firms from its subsidies for lithium-ion batteries. Samsung SDI lost about 2 percent.

At a ceremony to open the securities market, Jeong Chan-woo, CEO of the Korea Exchange, pledged to boost transactions in the Korean capital market in 2017 by developing innovative stock indexes. 

The performance of stock indexes on the first day of a year is highly likely to follow previous trading trends, according to statistics by Korea Exchange.

The probability of stock movements on the Kospi on the first day of a year resembling those on the last day is about 82 percent, according to the stock trading board operator. Since 2006, the directions of the Kospi on the first day of a new year and the last day of the previous year turned out to be in alignment except for 2014 and 2015.

“Psychologically, the first day means a lot to retail investors,” said an investment advisor. “It sometimes gives a hint as to how the market will move throughout the year.”

Samsung Securities projected the Kospi would move up and down in the range between 1,860 and 2,210 this year.

Market observers said January will not be a bad month for the local stock market.

Starting with Samsung Electronics on Friday, announcements of corporate earnings for the fourth quarter will begin. There are positive earnings forecasts for Korean businesses due to the improved global conditions in the latter part of last year. 

“Market consensus for the Q4 corporate performances was raised in December, which can suggest strong rallies in early January,” noted a report by Fn Guide, a local financial information provider.

Some are more optimistic about the whole year.

“Historically, the three lows -- low interest rates, low oil prices and low foreign exchange rates -- had helped bouy the Kospi,” said John Kim, a strategist at IBK Investment & Securities. “The possibility of the Kospi exceeding its limited range is higher than before in 2017.” 

By Song Su-hyun (song@heraldcorp.com)