Korean Markets Surge to Historic Levels Amid U.S. Shutdown Concerns

South Korea's financial markets soared to unprecedented heights as the benchmark KOSPI index broke records on Monday, even as global uncertainty mounts due to the potential U.S. government shutdown. Investors, driven by optimism ahead of the Chuseok holiday, fueled the rally, which saw significant participation from foreign and institutional investors.

The KOSPI closed at a record 3,549.21, representing a gain of 93.38 points or 2.7% compared to its previous close of 3,455.83. Opening strong at 3,525.48 (a 2.02% rise), the index sustained its momentum above the critical 3,500-point threshold throughout the day.

Data from the Korea Exchange shows retail investors as net sellers, unloading shares worth ₩3.39 trillion ($2.53 billion). Conversely, foreign investors and institutions emerged as decisive buyers, acquiring net shares valued at ₩3.27 trillion ($2.44 billion) and ₩967 billion ($722.0 million), respectively.

Tech Sector Outperforms: Samsung Nears ₩90,000; SK Hynix Hits Record High

South Korea’s tech sector played a pivotal role in Monday’s rally, with most blue-chip stocks posting robust gains. The sole laggard among market heavyweights was Hanwha Aerospace, dipping slightly by 0.18%.

Samsung Electronics emerged as a major driver, climbing 3.49% and closing just shy of the ₩90,000 mark. LG Energy Solution saw an extraordinary surge of 14.82%, while SK Hynix outperformed with an impressive gain of 9.86%, reaching a new all-time high.

“The semiconductor sector has been a magnet for foreign and institutional investors,” noted Lee Jae-won, a leading researcher at Shinhan Investment & Securities. “It’s especially notable that foreign investors have been net buyers of Samsung Electronics for 15 consecutive trading sessions, further bolstering confidence ahead of the Chuseok holiday.”

KOSDAQ Rises Despite Limited Retail Activity

The KOSDAQ index also closed in positive territory, gaining 1.05% to settle at 854.25. After starting the day at 853.40 (a 0.95% increase), the index experienced a slight deceleration later in the trading session.

Retail investors remained on the sidelines, recording a net sell-off of ₩830 billion ($619.9 million). However, foreign and institutional investors stepped in to purchase net shares worth ₩968 billion ($723.4 million) and ₩139 billion ($104.0 million), respectively.

“Despite hitting new highs, retail participation in this rally has been subdued,” observed Lee Jae-won. Outstanding stock investment deposits currently total ₩76 trillion ($56.8 billion), nearing their peak of ₩78 trillion ($58.4 billion). “Post-holiday, market focus may shift to stocks with positive earnings momentum, particularly as Samsung Electronics is preparing to release its preliminary earnings soon.”

Mixed Results Among KOSDAQ Large Caps

Performance among KOSDAQ’s leading stocks revealed a mixed picture. Notable declines included Paramerit Research, which dropped 2.29%, while Rainbow Robotics remained steady. On the other hand, companies like Ecopro BM (+3.02%), Alteogen (+2.51%), LIG ChemBio (+2.29%), and Sam Chun Dang Pharm (+1.66%) closed higher, contributing to the market's resilience.

Currency Market: Korean Won Strengthens Against the Dollar

In the currency exchange market, the South Korean won showed slight appreciation against the U.S. dollar, with the exchange rate ending the session at ₩1,400.0 per dollar, down 3.2 won from the previous close of ₩1,403.2.

The strengthening of the won reflects strong investor sentiment amid global uncertainty. While South Korea’s financial markets are closed for the Chuseok holiday starting Tuesday, global developments—particularly the U.S. government shutdown and corporate earnings announcements—remain key factors to watch as trading resumes later this week.