A day after the KOSPI closed at the so-called "five-thousand-pi," it set a record high of 5,170 points. The KOSDAQ also broke above the 1,100 mark for the first time in 25 years and closed there. Direct buying and indirect inflows through ETFs provided twin engines, sending both the KOSPI and KOSDAQ to record high rallies.
On the 28th, the KOSPI closed at 5,170.81, up 85.96 points (1.69%) from the previous trading day. The KOSDAQ also finished at 1,133.52, up 4.70% (50.93 points) from the day before.
The main board was led by individual investors. In the KOSPI market, retail investors were net buyers of more than 1.2 trillion won, lifting the index. Foreigners and institutions, by contrast, sold 142.8 billion won and 1.0393 trillion won, respectively. Their flows are estimated to have shifted to the KOSDAQ market.
Both the KOSPI and KOSDAQ surged, but the drivers differed. The KOSPI was led by Samsung Electronics and SK hynix. Samsung Electronics ended the session ushering in the "160,000-electronics" era, and SK hynix the "840,000-nix" era. At one point intraday, Samsung Electronics spiked to 163,300 won and SK hynix to 854,000 won, hitting record highs.
Lee Jae-won, a Shinhan Investment & Securities researcher, said, "The KOSPI index hit a record high in tandem as large-cap stocks set new peaks," and added, "Unlike the KOSDAQ, the KOSPI's rise is clearly due to upward revisions to earnings estimates."
With earnings reports from major corporations at home and abroad approaching, expectations appeared to flow in, lifting the market broadly. Magnificent 7 (M7) big tech firms such as Microsoft, Meta and Tesla, as well as Samsung Electronics and SK hynix, all are set to report tomorrow.
Lee Kyung-min, a Daishin Securities researcher, said, "With earnings announcements scheduled tomorrow for major global corporations and Korea's leading semiconductor names such as Samsung Electronics and SK hynix, positive expectations for results are holding," adding, "In particular, expectations remain for solid artificial intelligence (AI) data center demand and a continued semiconductor cycle."
The KOSDAQ market appears to have been driven by retail funds flowing in via ETFs. On the day, individual investors were net sellers of more than 2.4 trillion won in the KOSDAQ market. Foreigners were net buyers of 493.6 billion won, and institutions were net buyers of more than 2.3 trillion won.
Within institutional flows, the focus should be on financial investment firms. Financial investment bought a net of more than 2 trillion won in a single day. When retail investors buy ETFs, liquidity providers (LPs) purchase the ETFs' constituent stocks in the market during the creation and redemption process. These amounts are recorded as financial investment flows.
Researcher Lee Jae-won analyzed, "Amid net buying of index and leveraged ETFs, strength persisted in large caps with high weights inside ETFs that track the two markets," adding, "In particular, KOSDAQ 150 names were strong."
Some also note the need to pay attention to the national pension funds turning net buyers in the KOSDAQ market for four straight trading days. On the day, pension funds were net buyers of 91.4 billion won in the KOSDAQ market. Researcher Lee Kyung-min explained, "Recent government support policies for the KOSDAQ brought in seed money, and around the Jan. 26 National Pension Service January fund committee decision to raise the domestic stock target, buying in the KOSDAQ has continued."
A stronger won also helped. After recently touching 1,480 won, the won-dollar exchange rate has been falling and reached 1,420 won on the day.