The KOSPI index closed above 8,000 points for the first time ever. As the United States and Iran showed significant progress in end-of-war talks that include scrapping highly enriched uranium, the surge in international oil prices and U.S. Government Bonds yields eased, and funds flowed into the stock market, a risk asset, helping Korea's market settle above the 8,000 level.
On an intraday basis, it also topped the 8,000 level on the 15th, but this is the first time the KOSPI index has finished above 8,000 at the close. Ahead of the launch the next day of single-stock leveraged exchange-traded funds (ETFs) on Samsung Electronics and SK hynix, the two stocks each hit intraday record highs.
On the 26th, the KOSPI index rose 199.80 points (2.55%) to finish at 8,047.51. The KOSPI index also surpassed 8,131 points intraday. Both intraday and closing levels are at a record high.
Institutions led the index higher. Combining the Korea Exchange (KRX) and NEXTRADE (NXT), individuals posted net sales of 1.2 trillion won in the main board, while institutions were net buyers of nearly 1.3 trillion won. Among institutions, pension funds were net sellers, but brokerages, where ETF fund flows are tallied, were net buyers by 1.7 trillion won.
Foreign investors were net buyers, but not by a large margin. However, in KOSPI 200 futures, foreigners were net buyers of nearly 300 billion won.
Expectations grew that the United States and Iran could end the war soon. The two countries extended the truce by 60 days and appear to be making every effort to arrange end-of-war talks that include dismantling Iran's nuclear program. As word spread that the Middle East situation could stabilize, international oil prices fell sharply below $100 per barrel, and the surging U.S. Government Bonds yields also eased.
U.S. markets were closed the previous day for Memorial Day, but Japan and Taiwan hit all-time highs, extending their rally. As global investment funds flowed into Asian markets, Korea's market also strengthened on the day. However, Japan and Taiwan edged lower, catching their breath.
The strength of the U.S. dollar also eased slightly. The won-dollar exchange rate ended weekly trading at 1,504.3 won, down 12.9 won.
The market's strength also appears to reflect expectations for single-stock leveraged (including inverse) ETFs launching tomorrow. On the 27th, leveraged ETFs with Samsung Electronics and SK hynix as the underlying asset will list. The combined initial creation amount for the Samsung Electronics leveraged ETFs is 1.75 trillion won, and for SK hynix it exceeds 2.2 trillion won. This is expected to be the largest-ever amount for a new listing of a single-type ETF.
With secondary battery and biotech sectors rising together, the KOSDAQ market also strengthened. The KOSDAQ index rose 11.39 points (0.98%) to finish at 1,172.52. It briefly topped 1,200 points intraday, but as investment funds concentrated in the main board, the KOSDAQ market's gains narrowed somewhat.