KOSPI Hits Record High for Third Consecutive Session Backed by Foreign and Institutional Buying

South Korea’s KOSPI index achieved an unprecedented milestone, closing at a record high for the third consecutive trading session. The rally was fueled by robust buying activity from foreign and institutional investors, highlighting strong market momentum despite profit-taking by retail investors. This bullish sentiment underscores increasing confidence in the market as the index continues its upward trajectory.

Remarkable Market Performance: KOSPI Crosses Historic Thresholds

On Monday, the KOSPI closed at 3,395.54, soaring by 51.34 points (1.54%) from its previous close of 3,344.20. The market opened strong at 3,374.65, representing a 0.91% gain. In just three trading sessions, the index has repeatedly broken records, surpassing its previous all-time high of 3,305.21 from July 2021. Notably, the KOSPI surpassed the 3,360 benchmark during intraday trading, closing firmly above this critical resistance level.

The upward momentum was particularly impressive given the narrowing gains after the strong opening. However, renewed buying interest in the afternoon revitalized the market, pushing the index higher.

Foreign and Institutional Buyers Lead the Surge

The driving force behind the KOSPI’s rally was the sustained investment from foreign and institutional participants. While retail investors net-sold 2.1473 trillion won ($1.54 billion) worth of shares, foreign investors countered this with net purchases of 1.3708 trillion won ($985 million). Institutional investors also bolstered their positions substantially, adding another 827.5 billion won ($594 million).

Jaewon Lee, an analyst at Shinhan Investment Corp., remarked, “The five-day net buying streak by foreign and institutional investors has been a key price stabilizer. Eased concerns over U.S. inflation and reduced tariff-driven price pressures have created a favorable liquidity environment for the market.”

Diverging Performances Among Large-Cap Stocks

Despite the overall market rally, South Korea’s largest-cap stocks delivered a mixed performance. Semiconductor leader SK Hynix rose an impressive 7.17%, while Samsung Electronics, the market bellwether, climbed 2.45%. Financial giant KB Financial added 1.45% to its valuation.

Conversely, several large-cap stocks underperformed. HD Hyundai Heavy Industries declined by 1.35%, Hanwha Aerospace slipped 0.30%, and Samsung Biologics faced a slight dip of 0.10%. Hyundai Motor, another prominent player, traded flat.

Lee further commented, “Semiconductors have been instrumental in driving recent gains, with reduced concerns over interest rate hikes and policy-related uncertainties catalyzing interest in blue-chip stocks. The market may see further upward momentum as additional positive catalysts emerge.”

KOSDAQ Joins the Bullish Trend

The optimism wasn’t limited to the KOSPI. South Korea’s secondary market, the KOSDAQ index, also displayed robust performance, closing at 847.08, up 12.32 points (1.48%). Opening higher at 839.73, the KOSDAQ extended its gains throughout the session.

As with the KOSPI, foreign and institutional investors were net buyers on the KOSDAQ. Foreign investors contributed a net 208.9 billion won ($150 million), while institutional investors added 89.1 billion won ($64 million). Retail investors, however, offloaded 268.4 billion won ($192 million) worth of shares.

Leading gainers in the KOSDAQ market included Alteogen, which rose 4.02%, Rainbow Robotics, climbing 2.08%, and EcoPro BM, up 1.45%. In contrast, PharmaResearch fell 1.07%, and ABL Bio dipped slightly by 0.09%.

South Korean Won Shows Marginal Strength Against U.S. Dollar

In the forex market, the South Korean won gained slightly against the U.S. dollar, closing at 1,388.0 won per dollar, a modest improvement of 2.70 won from the previous session. This exchange rate movement suggests a relatively stable currency environment amid ongoing market volatility.

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