KOSPI Hits Record Highs as Foreign and Institutional Buying Fuel Momentum

The KOSPI Index has continued its impressive rally, cementing record-high levels driven by strong foreign and institutional buying and positive macroeconomic sentiment. On the morning of September 12, the benchmark index displayed upward momentum following its record-breaking close the previous day, bolstered by signals from the U.S. stock market and South Korean President Yoon Suk-yeol’s remarks during his press conference.

At 9:21 a.m. KST, the KOSPI rose by 25.15 points (0.75%) to reach 3,369.35, based on data from the Korea Exchange. The index had opened higher at 3,374.65, gaining 30.45 points (0.91%) from the prior day’s close of 3,344.20. Despite these advances, the KOSPI struggled to surpass the psychologically significant 3,400 level during intraday trading.

South Korea's primary stock market has been on an extended winning streak since September 2, breaking its previous all-time high of 3,305.21 set on July 6, 2021. On September 10, the index surged to 3,314.53, achieving its new peak, followed by consecutive record closes through September 11.

Foreign and Institutional Investors Drive Market Momentum

A closer look at market dynamics reveals contrasting behaviors between various investor groups. Individual investors have been net sellers, unloading 332.6 billion KRW worth of shares during the morning session. However, foreign investors and institutions have acted as key drivers of the rally, with net purchases of 278.3 billion KRW and 80.1 billion KRW, respectively.

In terms of sector performance, technology (+1.28%), manufacturing (+1.14%), and precision medical instruments (+0.69%) have outpaced other industries, reflecting strong buying momentum in areas critical to South Korea's export-driven economy. On the other hand, electricity and gas (-2.38%), transportation equipment and parts (-1.01%), and telecommunications (-0.45%) reported declines.

Among the KOSPI's major stock components, SK hynix (+5.05%), Samsung Electronics (+2.18%), and LG Energy Solution (+1.14%) have posted substantial gains, shining as top performers amid robust demand for technology and green energy solutions. Conversely, HD Hyundai Heavy Industries (-2.32%), Hyundai Motor (-0.45%), and Samsung Biologics (-0.10%) experienced downward pressure.

Presidential Remarks and AI Growth Boost Investor Optimism

Optimism surrounding the market’s performance has been bolstered by recent comments made by President Yoon Suk-yeol in his 100-day press conference. Yoon emphasized the normalization of the stock market as a key policy agenda, signaling government willingness to address investor sentiment while crafting business-friendly regulations to stimulate economic activity.

Han Ji-young, a researcher at Kiwoom Securities, highlighted the correlation between Yoon's statements and the stock market rally, noting that "the administration’s policies to revitalize the market remain supportive." Han also attributed ongoing gains to global AI-led growth momentum, citing tech leaders such as Nvidia, Broadcom, and Oracle as harbingers of expanding opportunities for South Korean companies within artificial intelligence and semiconductors.

While the KOSPI has enjoyed an eight-day winning streak, Han cautioned that intraday fluctuations could continue before achieving further breakthroughs, though the domestic market’s medium-term outlook remains favorable.

KOSDAQ Capitalizes on Tech Sector Strength

The KOSDAQ Index, South Korea’s tech-heavy secondary market, has mirrored the bullish sentiment seen in its larger counterpart. As of 9:21 a.m. KST, the index climbed 7.47 points (0.89%) to trade at 842.23 following an earlier advance of 4.97 points (0.60%) at the opening bell.

Investor activity on the KOSDAQ exhibited different trends compared to the main market. Institutions net-sold 6.6 billion KRW worth of securities, while individual and foreign investors balanced this with net purchases of 8.9 billion KRW and 10.9 billion KRW, respectively.

Leading sectors included machinery and equipment (+1.76%) and electronics (+1.25%), driven by surging demand in automation and advanced manufacturing. Conversely, metals (-1.02%) and transportation equipment and parts (-0.97%) struggled amid weakening demand for raw materials and industrial components.

Top KOSDAQ performers during early trading were EcoPro BM (+2.14%), EcoPro (+1.85%), and Rainbow Robotics (+1.21%), reflecting strong interest in battery technologies and robotics innovation. On the downside, stocks like ABL Bio (-1.04%) and HLB (-1.15%) traded lower, weighed down by cautious sentiment around pharmaceuticals.

Despite potential volatility, Han maintained that the KOSDAQ would likely sustain its upward momentum in alignment with medium-term forecasts for the wider South Korean equities market.

Won-Dollar Exchange Rate Opens Lower as Rally Supports Sentiment

On the currency front, the Korean won opened slightly lower against the U.S. dollar in the Seoul forex market. The won traded at 1,390.0 KRW per USD, down 1.8 KRW from the previous day’s close of 1,391.8 KRW. The strengthening equity markets appear to be mitigating potential pressure on South Korea’s domestic currency, which has historically been sensitive to broader economic sentiment and foreign inflows linked to stock movements.

As the KOSPI and KOSDAQ indices continue their rally, market observers are closely watching global cues and government policies that could further enhance South Korea’s regional and global competitiveness. For now, the record-breaking momentum provides a strong foundation for investor optimism.