South Korean equities maintained their impressive five-session winning streak, largely fueled by robust performance in the semiconductor sector. However, market participants remained notably cautious ahead of the highly anticipated US Federal Reserve’s upcoming interest rate decision meeting this week.
The benchmark Korea Composite Stock Price Index (KOSPI) surged by 137.64 points, marking a 1.58 percent increase to close at 8,864.24. This significant gain positioned the index closer to the psychological 9,000-point threshold.
Despite an initial dip at market open, the KOSPI successfully reversed its course to enter positive territory by the afternoon session. This upward momentum was primarily driven by strong buying pressure from both retail and institutional investors.
Collectively, these domestic retail and institutional investor groups net purchased a substantial 1.1 trillion won (approximately $727.3 million) in shares. Conversely, foreign investors actively divested, selling a net 992.3 billion won from the market.
Lee Kyoung-min, a prominent analyst at Daishin Securities, commented on the current market dynamics, stating, “A prevailing ‘risk-on’ sentiment, largely stemming from the recent peace agreement between the United States and Iran, is currently coexisting with a cautious ‘wait-and-see’ approach ahead of the crucial Federal Open Market Committee (FOMC) meeting.”
According to Lee, many market watchers anticipate the new Fed chair, Kevin Warsh, will opt for an ‘on-hold’ decision regarding interest rates at Wednesday’s policy meeting. This expectation is largely attributed to a significant decline in global oil prices, which followed the US-Iran peace deal, effectively easing previously observed inflationary pressures.
Further bolstering market sentiment, a new state-run company, established to oversee Seoul’s substantial $350 billion investment pledge to the United States, is set to launch on Thursday. This development is expected to provide an additional significant boost to key sectors, including shipbuilding, semiconductor manufacturing, and nuclear power plant industries, the analyst noted.
Overall trade volume remained moderate, with 565.1 million shares exchanging hands, valued at 34.8 trillion won. Despite the KOSPI’s rise, market breadth indicated more declining stocks than advancing ones, with 525 losers against 347 winners.
Performance among market heavyweights was mixed, though the vital semiconductor sector demonstrated strong gains.
Leading tech giant Samsung Electronics saw its shares climb 1.02 percent to 346,500 won. Meanwhile, its key industry competitor, SK hynix, surged by an impressive 5.84 percent to 2,521,000 won, establishing a new record high.
The shipbuilding sector also experienced an uptick, driven by positive expectations surrounding the impending launch of the new South Korea-US investment firm later this week.
Specifically, Hanwha Ocean shares gained 3.02 percent to reach 133,100 won, while HD Hyundai Heavy Industries saw an increase of 1.29 percent, closing at 707,000 won.
However, not all sectors shared in the gains. Leading automaker Hyundai Motor shares declined by 3.44 percent to 618,000 won, and major financial institution KB Financial also retreated, losing 4.65 percent to settle at 164,000 won.
