Seoul, July 19, 2024 — South Korea’s main stock index, the KOSPI, surged past 4,900 points for the first time ever today, fueled by robust foreign investment despite ongoing concerns about potential tariffs from the U.S. The KOSDAQ also experienced a significant jump, reaching its highest level in four years.
KOSPI Breaks Record, Driven by Foreign Buying
The KOSPI closed at a record high, edging closer to the 5,000-point milestone amid global economic uncertainties.
- The KOSPI closed at 4,904.66, up 1.32% from the previous day.
- The KOSDAQ index exceeded 960, a four-year high.
- Foreign investors drove the market gains with a net purchase of 547.3 billion won.
The KOSPI finished the day at 4,904.66, a gain of 63.92 points (1.32%) and a new all-time closing high. Investors are now a mere 95 points away from the psychologically important 5,000 mark. The index began the day slightly down at 4,829.40, fluctuating in a narrow range before shifting decisively upward. It briefly hit an intraday high of 4,917.37, surpassing its previous peak.
This marks the 12th consecutive day of gains for the KOSPI, the longest such streak since a 13-day run from September 4-24, 2019. As of 3:30 p.m. local time, the won-to-dollar exchange rate stood at 1,473.7 won, up 0.1 won from the previous day.
Foreign Investment Fuels Rally
Foreign investors were the primary drivers of today’s market surge, injecting a net 547.3 billion won into the market. Conversely, individual and institutional investors were net sellers, offloading 750.7 billion won and 24.3 billion won worth of stocks, respectively. Foreigners also demonstrated strong confidence in KOSPI 200 futures, with a net purchase of 123.2 billion won.
What factors are influencing the KOSPI’s recent performance? The market’s resilience comes despite a backdrop of global economic headwinds, including concerns over potential tariffs and shifting expectations for interest rate cuts.
Last week, the three major U.S. stock indices experienced a broad decline, creating some market hesitancy. Uncertainty was further amplified by comments from U.S. President Donald Trump, which cast doubt on the candidacy of Kevin Hassett, the White House National Economic Council Chairman, for the next Federal Reserve Chairman. Adding to the geopolitical tensions, U.S. Secretary of Commerce Howard Rutnick warned major semiconductor-producing nations, including Korea, about the possibility of “100% semiconductor tariffs” if they don’t invest in the United States. Trump also announced a 10% tariff on eight European countries that have deployed troops to Greenland.
Initially, these developments created downward pressure on the KOSPI. However, the tide turned as foreign buying intensified throughout the day. Stocks within the Hyundai Motor Group, buoyed by expectations surrounding robotics showcased at the recent Consumer Electronics Show (CES), led the gains, alongside strong performances in the defense and shipbuilding sectors.
“The KOSPI has risen for 12 consecutive days, with buying shifting towards Hyundai Motor Group and others due to expectations of ‘physical AI’,” noted Lee Gyeong-min, a researcher at Daishin Securities. “The 5,000-point level is now within visible range.”
Sector Performance and Key Stocks
Samsung Electronics, after a brief dip in early trading, rebounded to surpass the 150,000 won level during intraday trading for the first time in history. SK Hynix also contributed to the rally, rising 1.06%. Hyundai Motor Company soared 16.22%, climbing to third place in KOSPI market capitalization, while Kia and Hyundai Mobis also saw significant gains.
Defense stocks, such as Hanwha Aerospace, benefited from the heightened geopolitical tensions surrounding Greenland, while shipbuilding companies like HD Hyundai Heavy Industries and Hanwha Ocean also contributed to the index’s rise. However, secondary battery stocks, including LG Energy Solution, Samsung SDI, and POSCO Holdings, experienced some selling pressure.
Conversely, stocks in the bio sector, such as Samsung BioLogics, Celltrion, and SK Square, along with KB Finance and Samsung C&T, declined. Despite the overall bullish trend, more stocks fell (489) than rose (398) in the KOSPI market, indicating that the gains were largely concentrated in large-cap stocks.
By industry, transportation equipment (7.08%), entertainment and culture (5.57%), and steel materials (2.07%) led the gains, while healthcare (-2.47%) and pharmaceuticals (-1.15%) lagged behind.
KOSDAQ Also Climbs
The KOSDAQ index continued its upward trajectory for the third consecutive trading day, closing at 968.36, up 13.77 points (1.44%). This is the highest closing level in four years, since January 14, 2022 (971.39). The index began the day down but reversed course during the day, accelerating its gains.
Foreign investors were again key, with net purchases of 203.4 billion won, while individuals and institutions were net sellers, with 137.2 billion won and 29.8 billion won, respectively. Eco Pro BM and Eco Pro led the gains in the secondary battery sector, driving the index higher. The momentum from Hyundai Motor Group’s robotics initiatives also boosted related stocks, with Neuromeca and Hyulim Robot hitting their daily upper limits, and Rainbow Robotics and T-Robotics also soaring.
On the other hand, Alteogen, ABL Bio, HLB, Samchundang Pharmaceutical, and Pharma Research experienced declines.
Total trading volume in the stock market and KOSDAQ market reached 25.186 trillion won and 12.988 trillion won, respectively, with the alternative exchange Nexttrade’s free market and main market seeing a total trading volume of 16.73 trillion won.
