The KOSPI index broke through 9,000 points for the first time ever. As the index has set a new all-time record day after day this year alone, some say Korea's stock market has successfully improved its fundamentals.
Even though the U.S. Federal Reserve (Fed) the previous day hinted at the possibility of a rate hike within the year, investor sentiment toward Korean stocks did not waver. With buying concentrated in large-cap semiconductor stocks, the index once again set a record high, and it also broke through the 9,100 level during the session.
On the 18th, the KOSPI finished trading at 9,063.84, up 199.60 points (2.25%) from the previous trading day. After a higher open, the KOSPI index widened its gains and at one point during the session climbed to 9,106.07. After topping 8,000 points in Aug., the KOSPI index reached the new milestone of the 9,000 level in just a month. In particular, it extended a steep rally, rising more than 1,000 points over just the past five trading days.
Semiconductor stocks again led the index's advance. SK hynix rose intraday to 2,738,000 won, setting another record high. SK Square also broke through 1.7 million won at the close, marking a new all-time high. Samsung Electronics gained more than 4%, and Samsung Electro-Mechanics rose more than 8%, helping lift the index.
Mirae Asset Securities, which flagged the largest-ever share buyback, also showed strength. Mirae Asset Securities preferred and Mirae Asset Securities preferred 2B both finished up more than 10% from the previous trading day.
The Fed hinted at tightening, but it did not break the rally in Korea's stock market. New York stocks fell across the board the previous day after the Fed hinted at a rate hike within the year. However, the domestic market continued its strength, putting more weight on expectations for increased demand for artificial intelligence (AI) semiconductors and an improved earnings outlook.
Even foreigners, who had been net sellers of around 1 trillion won through the morning, turned to net buying. Combining trading value from the Korea Exchange (KRX) and NEXTRADE (NXT), foreigners were net buyers of more than 1.42 trillion won. In contrast, individuals and institutions were net sellers of about 530 billion won and 670 billion won, respectively, taking profits. Foreign investors, who showed selling dominance early in the session, shifted to large-scale net buying, which is seen to have supported the index's rise.
Lee Kyung-min, a researcher at Daishin Securities, said, "Policy expectations and earnings momentum, the key drivers of the KOSPI's rise, are strengthening," and "the scale of share cancellations by corporations has already surpassed last year's level, and more corporations are seeing earnings forecasts revised upward ahead of earnings season."
However, there is also analysis that, unlike the index's rise, the warmth has not spread across the market. On the main board, the number of decliners (791) far outpaced gainers (109), and KOSDAQ weakened, surrendering the 1,000 level during the session.
The KOSDAQ index closed lower amid concurrent selling by foreigners and institutions. The KOSDAQ index ended the day at 1,000.93, down 31.03 points (3.01%) from the previous trading day.
Many of the top market-cap stocks weakened, moving in the opposite direction of the KOSPI. While semiconductors and some large caps pulled the index higher, flows did not spread to small and mid caps and growth stocks, deepening polarization by stock. On the KOSDAQ market, individuals alone turned to net buying, but they could not offset selling by foreigners and institutions.