South Korean Stock Market Rebounds Amid U.S. Shutdown Concerns, Powered by Export Strength

Markets Rally as Exports Drive Momentum

South Korea’s stock markets demonstrated resilience, closing nearly 1% higher despite uncertainties surrounding a potential U.S. government shutdown. Robust export performance, coupled with strong foreign and institutional buying, fueled the rally on the benchmark indices.

The Korea Exchange reported that the KOSPI gained 31.23 points, or 0.91%, ending at 3,455.83 compared to the previous session’s close at 3,424.60. The benchmark index opened at 3,444.06, immediately adding 19.46 points, or 0.57%, and maintained its upward trajectory throughout the trading session.

Foreign and institutional investors were significant drivers of this surge, recording net stock purchases of 8.46 trillion won and 2.20 trillion won, respectively. Retail investors, however, took the opportunity to offload shares, with net sales totaling 10.85 trillion won.

Export Growth and Semiconductor Surge Elevate Key Sectors

South Korea’s export-driven economy showed renewed strength in September, with exports reaching their highest levels in three and a half years. This marked four consecutive months of export growth, spurred by a weaker won that enhanced competitiveness in industries such as semiconductors and automobiles.

The stock market reflected this positive trend as major KOSPI-listed firms rallied broadly. Samsung Electronics posted a 2.50% gain, while SK Hynix surged 3.60%. Doosan Enerbility climbed 3.03%, and Samsung Biologics rose 0.80%. However, Hanwha Aerospace bucked the trend, slipping 0.72%, and LG Energy Solution remained flat.

Jaewon Lee, a researcher at Shinhan Investment Corp., noted the importance of these export-fueled gains. “September exports soared to their highest level in three years and six months. The weaker won, combined with strong global demand, created a favorable environment for semiconductor, automotive, and shipbuilding stocks. This momentum persists even amid the Federal Reserve’s high-interest-rate policies.”

KOSDAQ Gains Led by Institutional Investment

The KOSDAQ also mirrored the uptick, closing the session at 845.34, up 3.35 points or 0.40%. The secondary index opened higher at 846.32 and maintained its upward movement through the day.

Institutional investors dominated the activity, recording net purchases worth 979 billion won. Meanwhile, individual investors and foreign investors were net sellers, unloading 289 billion won and 596 billion won in shares, respectively.

Performance among top KOSDAQ stocks was mixed. RiGA ChemBio posted an impressive 5.48% rise, and ABL Bio gained 2.81%. However, PharmaResearch saw a sharp decline of 5.66%, and Samchundang Pharm fell 2.09%, highlighting ongoing volatility within certain sectors.

Minimal Impact Expected From U.S. Shutdown Concerns

Despite ongoing concerns about a potential U.S. government shutdown, its impact on South Korea’s markets is projected to remain limited. Historical data suggests such events have had negligible long-term effects on the stock market.

Researcher Lee expressed confidence, stating, “Although the prospect of a U.S. government shutdown creates global uncertainty, its influence on South Korea's equities has been minimal in past cases. Notably, foreign investors have maintained their bullish stance, marking 14 consecutive trading sessions of net buying activity in Samsung Electronics.”

South Korean Won Eases Slightly Against U.S. Dollar

On the foreign exchange front, the South Korean won registered a slight depreciation against the U.S. dollar. The won-dollar exchange rate concluded at 1,403.2, a marginal increase of 0.3 won from the prior session’s close of 1,402.9. The dollar's persistent strength continues to exert mild downward pressure on the local currency.

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