On the 10th, the KOSPI hit an all-time high. On top of expectations for U.S. rate cuts, hopes for domestic stock market support policies helped the market set a new record for the first time in four years. Foreigners and institutions were net buyers of more than 2 trillion won combined.
Investors are expected to focus on President Lee Jae-myung's 100th-day-in-office press conference scheduled for the next day (the 11th) and the trajectory of the August consumer price index (CPI) to be released in the United States.
On the 10th, the KOSPI finished at 3,314.53, up 54.48 points (1.67%) from the previous trading day, setting an all-time closing high. After opening up 0.38%, the KOSPI gradually widened its gains. In the afternoon, the KOSPI briefly hit 3,317.77. The previous intraday record was 3,316.08, set in June 2021.
The day's rally was thanks to inflows from institutions and foreigners. Foreigners and institutions were net buyers of 1.378 trillion won and 902.9 billion won, respectively. Individuals sold 2.2545 trillion won to take profits.
Investor sentiment improved sharply as factors that had kept the domestic stock market moving sideways were resolved in succession. Concerns that global big tech firms would stall eased, and expectations for U.S. rate cuts grew. The major shareholder capital gains tax threshold, which had angered investors, is not expected to be tightened.
Last month, the domestic market was stuck in a box range after remarks by OpenAI Chief Executive Officer Sam Altman about an AI bubble, cautious comments from the U.S. Federal Reserve (Fed) on rate cuts, and disappointment over tax reform proposals. The index moved in the 3,100–3,200 range.
But sentiment has somewhat reversed this month. As U.S. employment showed signs of slowing, expectations strengthened that the Fed would cut rates. With strong results from big tech such as Nvidia, the AI bubble argument also lost steam.
The decisive factor lifting the market that day was the expectation that the major shareholder capital gains tax threshold, which had been set to be tightened, would be kept at current levels.
Last month, the government announced a tax reform plan that would tighten the major shareholder threshold from 5 billion won to 1 billion won, but it began a review as investor backlash intensified. The Lee Jae-myung administration is said to be planning to confirm at the press conference on the 11th that it will keep the threshold at the existing 5 billion won.
Lee Jae-won, a researcher at Shinhan Investment & Securities, said, "The factors that kept the stock market moving sideways in August have eased, and foreign capital inflows are resuming," and noted, "Foreigners and institutions conducted large-scale net buying for three consecutive trading days, reflecting expectations for performance."
Securities and financial holding-related stocks rose sharply in particular. With the capital market becoming more active, analysts said earnings for related stocks could improve. Financial holding companies including KB Financial, Hana Financial Group, Woori Financial Group, and Industrial Bank of Korea, as well as securities stocks such as BOOKOOK Securities, Kiwoom Securities, and Korea Investment Holdings, all rallied.
SK hynix rose 5.56%, extending its recent gains, and Samsung Electronics added 1.54%.
Going forward, the direction of the domestic stock market is expected to be determined by the president's 100th-day-in-office press conference on the 11th and the release of the U.S. August consumer price index.
In the United States, the August consumer price index will be released. With markets confident of a September rate cut by the Fed, the degree of the cut is seen hinging on the consumer price index. For now, the base case is a 0.25-percentage-point cut, but depending on the CPI, a 0.5% (a big cut) reduction or additional cuts after next month are also possible.
The KOSDAQ closed at 833, up 8.18 points (0.99%) from the previous trading day, drawing relatively little attention. Foreigners and institutions were net buyers of 78.9 billion won and 62.8 billion won, respectively, while individuals alone were net sellers of 133.2 billion won.
In the Seoul foreign exchange market that day, the won-dollar exchange rate closed at 1,387 won, down 3 won (0.22%) from the previous day.