Kospi Achieves Historic Milestone, Surges Past 4000 Amid Economic Optimism

South Korea’s Kospi index has reached an unprecedented high, closing above the 4000 mark for the first time on October 27, fueled by strong foreign and institutional buying. This milestone reflects growing optimism surrounding a potential U.S. Federal Reserve interest rate cut, key international summits, and robust corporate earnings reports.

According to the Korea Exchange, the Kospi ended Friday’s trading session at 4042.83, gaining 101.24 points (2.57%) compared to its previous close of 3941.59. The index opened the day at 3999.79, a 58.20-point increase (1.48%) from Thursday’s close, and subsequently surged past the psychologically significant 4000 threshold early in the session.

Regional Equity Market Milestones: Asia Markets Seize Momentum

The Kospi’s rally has coincided with record-breaking highs across Asia, including Japan’s Nikkei climbing past the 50000 mark. These developments underscore bullish sentiment in the region’s equities markets.

“This dual milestone — Kospi at 4000 and Nikkei at 50000 — represents a confluence of positive factors, including trade dynamics, corporate earnings momentum, accommodative monetary policies, and geopolitical developments,” remarked Jae-won Lee, a researcher at Shinhan Investment Corp.

Foreign investors and institutions were instrumental in Friday’s rally. On the main Kospi board, foreign investors purchased KRW 647.1 billion ($481 million) worth of shares, while institutions bought KRW 234.2 billion ($174 million) net. Conversely, individual investors liquidated KRW 796.2 billion ($592 million), demonstrating differing market strategies among investor types.

Foreign Investment Powers Kospi’s Record Climb

The sustained participation of foreign investors has been a key driver of the Kospi’s historic ascent. For October alone, foreign investors have accumulated KRW 5.2 trillion ($3.9 billion) worth of Korean equities, propelling the index to new highs. Jae-won Lee emphasized, “The recent surge in foreign buying, coupled with anticipation surrounding upcoming international summits, has set the stage for continued growth. Corporate Q3 earnings also remain a focal point.”

South Korea’s blue-chip stocks played a pivotal role in Friday’s rally, with many posting gains. Among the notable performers was Samsung Electronics, which rose 3.24% to hit KRW 102,000 per share, marking a record high. SK Hynix also advanced significantly, climbing 4.90% to KRW 535,000, another all-time high. HD Hyundai Heavy Industries surged 5.05%, while Samsung Biologics gained 2.55%. Kia Motors, however, declined marginally by 0.09%.

Geopolitical and Trade Developments Shape Investor Sentiment

Upcoming international summits and trade negotiations are further fueling market optimism. President Trump, in a speech during his Asia tour, hinted at the conclusion of major trade discussions with South Korea. The financial markets are carefully monitoring the Korea-U.S. summit on October 29, the U.S.-China summit on October 30, and the Korea-China summit on November 1, all occurring during the APEC meeting in Gyeongju.

Late October will also see the release of Q3 corporate earnings from major firms in the semiconductor and tech sectors, adding another layer of anticipation. Key reports include SK Hynix and U.S. tech giants such as Microsoft, Alphabet, and Meta on October 29, followed by Amazon and Apple on October 30. These announcements are expected to further influence regional markets.

Kosdaq Rides Positive Momentum

South Korea’s secondary index, the Kosdaq, also benefited from robust foreign and institutional support, advancing 19.62 points (2.22%) to close at 902.70, surpassing the 900 threshold. Starting the day at 890.23, Kosdaq gained 7.15 points (0.81%) on opening, indicative of strong positive momentum.

Similar to the Kospi, individual investors on the Kosdaq engaged in net selling, offloading KRW 325.9 billion ($243 million) worth of shares. Meanwhile, foreign investors and institutions net purchased KRW 265.4 billion ($198 million) and KRW 53.4 billion ($40 million), respectively.

Key players on the Kosdaq saw mixed performance numbers. PharmaResearch fell by 2.55%, while Alteogen spiked 8.41%. Samchundang Pharm soared 13.45%, and EcoPro gained 6.23%, highlighting the continued appeal of tech-heavy and growth stocks.

Interest Rate Speculations Bolster Risk Asset Investments

The anticipation of a U.S. Federal Reserve rate cut has amplified overall investor confidence, encouraging higher-risk investments. September’s consumer inflation data came in lower than expected, increasing market bets on a near-term rate cut. According to analysts, the likelihood of an October rate cut now stands at an impressive 96.7%.

Aligned with these monetary expectations, the South Korean won strengthened against the U.S. dollar, with the exchange rate closing at 1431.7 won per dollar, down 5.4 won from the previous day’s 1437.1 won.

Across Asia’s equity markets, the interplay between technical breakthroughs and sentiment-driven optimism is creating fertile ground for continued growth. Looking ahead, geopolitical events, corporate earnings, and monetary policy changes are poised to further shape market trajectories.