It was a day of catching its breath for the KOSPI as it approached the 5,000 mark. The KOSPI, which had risen all through the new year, turned lower for the first time in 13 sessions on profit-taking and sector rotation. In contrast, the KOSDAQ showed strength, topping the 980 level intraday for the first time in four years.
On the 20th, the KOSPI fell 18.91 points (0.39%) to close at 4,885.75. It was the first lower close for the KOSPI in 13 trading days this year.
The KOSPI opened at 4,900.28, down 0.09% from the previous day, then turned slightly higher and touched 4,920 for the first time ever. But it soon reversed lower and gave up the 4,900 level.
Individuals propped up the main board that day. They bought more than 900 billion won during the morning session, fending off selling by foreigners and institutions. However, as both foreigners and institutions narrowed their net selling in the afternoon, the KOSPI briefly turned higher.
Analysts said profit-taking in leading stocks and rotation unfolded in the KOSPI, which had surged for 12 sessions as soon as 2026 began. Lee Jae-won of Daishin Securities said, "After profit-taking in leading stocks, rotation unfolded quickly."
Lee Jae-won, a researcher at Shinhan Investment & Securities, said, "Amid the 12-session streak of record-setting gains, the KOSPI RSI exceeded 80 as of the 14th, entering overbought territory." The RSI is an indicator of market overheating, and readings above 70 are considered overbought.
Large-cap semiconductor stocks that have led the KOSPI ended lower. Both Samsung Electronics and Hyundai Motor fell 2.75% on the day. In addition, all of the top 10 stocks by market capitalization, except LG Energy Solution, flashed red.
Lee Jae-won said, "Profit-taking emerged mainly in large export stocks that recently led the index higher, including semiconductors, shipbuilding, automobiles, electric machinery, and securities."
The government unveiled policies to revitalize the domestic stock market, but they appeared to have little effect today. The Ministry of Economy and Finance announced legislative revisions that include a plan to grant individual investors in the Public Growth Fund a tax deduction of up to 40%, and the inclusion of the return-to-domestic-market account (RIA).
Still, analysts said the net selling by foreigners and institutions is not a major concern. Lee Kyung-min said, "Although foreigners and institutions are simultaneously net sellers, their selling has been concentrated in electric/electronics and transport equipment," adding, "Net selling in these two sectors exceeds total net selling—meaning that excluding the two, overall KOSPI buying remains intact."
The KOSDAQ, by contrast, was relatively firm. The KOSDAQ rose 8.01 points (0.83%) to close at 976.37. It even topped 980 intraday for the first time in four years. On the KOSDAQ, institutions led the session with net purchases in the 200 billion won range.
Regarding the KOSDAQ, Lee Jae-won said, "As profit-taking occurred in KOSPI leaders, flows moved into the KOSDAQ, leading it to outperform the KOSPI," adding, "In robot stocks that led early-year gains on the KOSDAQ, profit-taking took place, while previously neglected biotech and secondary battery names strengthened, pushing it past 980."
Looking ahead, with earnings season approaching, investors should closely watch each corporation's reporting schedule. Lee said, "Alongside geopolitical issues, the earnings calendar is expected to be the key driver of swings."