Korea's stock market made a comeback after a week. The U.S. consumer price index (CPI) for December last year significantly alleviated concerns over inflation.

The KOSPI index closed at 2,527.49 on the 16th, rising by 30.68 points (1.23%) from the previous day, recovering to the 2,500 range for the first time in four trading days. The KOSDAQ index also closed at 724.24, jumping 12.63 points (1.77%) in a single day, marking the highest level since November last year.

On Oct. 14, last year, women employees enjoy a walk during their lunch break at Yeouido Park in Yeongdeungpo-gu, Seoul. /Courtesy of News1

The South Korean stock market has experienced adjustments since the 9th due to strong employment indicators in the U.S. However, the U.S. price indicators alleviated market anxieties.

The U.S. CPI for December, released overnight, rose by 2.9% compared to the same period last year, matching expectations. The year-over-year increase in the core CPI, which excludes volatile food and energy prices, was 3.2%, falling below the expected rate (3.3%) and the November increase (3.3%). The yield on U.S. 10-year Government Bonds, which serves as a benchmark for global bond rates, surged to over 4.8% on the 13th but fell back to around 4.6% after the CPI provided relief.

The exchange rate of the won against the U.S. dollar also fell to the 1,450 won range, aiding foreign buying. The Monetary Policy Committee of the Bank of Korea expressed concerns over the exchange rate while keeping the benchmark interest rate steady at 3.0% that day but could not reverse the foreign buying trend.

Foreign investors bought a net 498.2 billion won in the KOSPI market that day. Institutions also showed a buying superiority of 17.7 billion won, while individuals sold a net 596.4 billion won. Foreigners also acquired KOSPI200 futures. In the KOSDAQ market, foreigners and institutions showed buying superiority of 226.7 billion won and 100.9 billion won, respectively, with individuals selling a net 321.8 billion won.

Foreign investors purchased 482 billion won worth of SK hynix and 55 billion won worth of Samsung Electronics, respectively. Companies in the bio sector, including HLB, Sam Chun Dang Pharm, Yuhan Corporation, Alteogen, and Samsung Biologics, were also among the top stocks bought by foreign investors.

Eiuntak Lee, a researcher at KB Securities, noted that considering typical residential lease contracts are made annually, if the decline in living costs is reflected, interest rates may continue their stabilization trend. He stated, "In a bubble market, interest rates tend to rebound faster than the adjustments made when the rapid rise in rates calms down," and added that he believes this will also happen this time, recommending an increase in weight in the IT sector and KOSDAQ market, which positively contribute to interest rate stability.

However, there are opinions warning against excessive optimism. This is because the possibility of prices fluctuating opens up with the inauguration of U.S. President Donald Trump on the 20th, depending on policy. Jeon Kyu-young, a researcher at Hana Securities, said, "If the Trump administration intensifies the deportation of illegal immigrants, a reduction in low-wage labor may further increase wages in the service sector, and escalating trade disputes could lead to rising import prices in the U.S."

For the time being, it is believed that a stock market led by individual corporations or sectors will continue. On that day, Daedong recorded the highest rate of increase in the KOSPI market amid expectations for Ukraine's reconstruction efforts. Hanwha Solutions and OCI also showed double-digit growth rates due to projections of the Trump administration's pro-solar policy.