Kospi soars to 3-year high on foreign buying, tech rally

Korea Herald

a day ago

Optimism builds as analysts forecast continued gains on policy, global tailwinds
The South Korean benchmark Kospi broke through the 2,900-point threshold for the first time in over three years on Wednesday, marking a notable milestone as it extends its bullish rally.
The Kospi reached as high as 2,904.21 during intraday trading, surpassing the 2,900 mark for the first time since it peaked at 2,902.79 on Jan. 18, 2022. The index opened at 2,887.32 and quickly gained in early trading, exceeding the 52-week high of 2,896.43 recorded on July 11 last year.
The rally followed overnight gains on Wall Street, driven by growing expectations of improved trade conditions between the US and China. Hopes are rising that restrictions on semiconductor sales to China may be eased.
After hitting its peak, the Kospi pared some gains, retreating to the 2,890-point range as of press time. At 2 p.m., it stood at 2,897.23, up 25.38 points or 0.88 percent from the previous session.
The index has been on a six-day winning streak, which began a day before the country's presidential election on June 3.
A massive influx of foreign capital has fueled the rally. Offshore investors purchased nearly 4 trillion won ($3 billion) worth of shares on the Kospi in June, extending the 1.16 trillion won net buying spree seen in May, according to Korea Exchange data.
As of 2 p.m. Wednesday, foreigners had net bought 72 billion won worth of shares, while institutional investors purchased 146 billion won. Retail investors, meanwhile, sold off 198 billion won, likely to lock in profits.
Market heavyweight stocks showed strong performances with tech giants leading the game, tracking the rally in US chip stocks.
Blue-chip shares Samsung Electronics and SK Hynix were up 0.93 percent and 4.12 percent, respectively, as of 2 p.m.
On the back of expectations for a de-escalation in the trade war, shares of LG Energy Solution, Hyundai Motor and Kia were also traded higher, while Hanwha Solution stocks surged by 18 percent as of press time.
In an attempt to support the rally, President Lee Jae-myung visited the headquarters of the Korea Exchange in Yeouido, western Seoul, on Wednesday, where he held a meeting to discuss measures to prevent unfair trading.
During the election campaign, Lee pledged to usher in a 'Kospi 5,000 era' by strengthening minority shareholder protections.
Amid the continuing upward momentum of the Kospi, local brokerage firms are upping their outlooks.
KB Securities, for instance, raised its 12-month target for the Kospi to 3,240 points by the first half of 2026.
'Although tariff risks are expected to continue through the third quarter, along with an increased possibility of a recession if the threats materialize into actual impositions, the Korean stock market is likely to demonstrate relatively strong resilience, supported by a weakening dollar, domestic stimulus measures and ongoing capital market reforms,' analyst Lee Eun-taek said.
'By the fourth quarter, trade tensions could enter a phase of resolution, leading to a rise in risk appetite and revitalized investment activity,' Lee added.
With the rally of the stock market, the secondary bourse Kosdaq stood at 786.09 as of 2 p.m., up 14.89 points or 1.93 percent.
The Korean won was quoted at 1,369.57 per dollar as of 2 p.m., losing value by roughly 5 won from the previous daytime trading.