KOSPI Reaches All-Time High Amid Surge in Foreign and Institutional Buying

The KOSPI index closed at a record high on October 10, fueled by optimism surrounding potential amendments to capital gains tax rules for major shareholders and the positive momentum of U.S. equity markets, which also hit new peaks. The substantial buying activity from foreign and institutional investors—totaling over KRW 2 trillion—drove the index to its highest level in more than four years.

According to the Korea Exchange, KOSPI closed the day at 3,314.53, gaining 54.48 points (1.67%) compared to its previous close of 3,260.05. This surpassed the prior all-time closing high of 3,305.21, set on July 6, 2021. During the session, the index even reached an intraday peak of 3,316.64, marking a four-year, two-month milestone.

Foreign and Institutional Investors Drive Strong Momentum

Foreign and institutional investors played a pivotal role in KOSPI’s high-energy performance. Foreign investors made net purchases totaling KRW 1.38 trillion, while institutional investors contributed with net buying of KRW 904.5 billion. In contrast, retail investors moved in the opposite direction, registering net sales of KRW 2.26 trillion.

Jae-won Lee, an analyst at Shinhan Investment Corp., explained, “This historic surge was fueled by robust buying from foreign and institutional investors, sustained by growing optimism around capital gains tax policies and other market-friendly conditions.”

KOSDAQ Reflects Parallel Buying Trends

The wave of optimism wasn’t confined to the KOSPI market alone. The KOSDAQ index demonstrated similar trends, supported by foreign and institutional investors’ buying activity. Despite retail investors recording a net sell-off of KRW 142.5 billion, foreign investors purchased KRW 103.8 billion worth of KOSDAQ shares, and institutional investors added another KRW 51.1 billion. This collective support bolstered the index’s performance, mirroring KOSPI’s upward trajectory.

Blue Chip Stocks Steer Gains, Led by SK Hynix and KB Financial

A majority of KOSPI's heavyweight stocks closed in positive territory, with notable contributions from Samsung Electronics, SK Hynix, and KB Financial. Samsung Electronics notched a 1.40% gain, while SK Hynix soared by 5.56%, and KB Financial surged 6.64%, solidifying the day’s impressive rally.

However, some notable laggards included LG Energy Solution, which declined 1.73%, and Samsung Biologics, which slid 0.58%.

Jae-won Lee further commented, “Investor sentiment has been lifted by expectations that the capital gains tax threshold will remain at KRW 50 billion. If confirmed during the president’s upcoming press conference, we may see sustained rallies, particularly in financial and brokerage stocks.”

Mixed Performances Among KOSDAQ Leaders

In the smaller-cap KOSDAQ market, outcomes were varied among the top-listed companies. Alteogen advanced 1.89%, and Rainbow Robotics climbed 3.41%. On the other hand, PharmaResearch dropped by 4.46%, while EcoPro BM dipped 1.87%.

Kyung-min Lee, a researcher at Daishin Securities, added, “Market sentiment remains optimistic, and the anticipation of indirect policymaking influence has played a substantial role in buoying investor confidence.”

Korean Won Appreciates Against U.S. Dollar

Alongside strong equity market performances, the South Korean won gained strength against the U.S. dollar in the foreign exchange market. The won-dollar exchange rate ended the day at 1,386.6, marking a 1.3-won appreciation from the prior session’s close of 1,387.9.

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