Kospi Surges to 7,000 Driven by Foreign Buying

**Seoul, South Korea** – The benchmark Kospi index experienced a remarkable surge on Wednesday, reclaiming the critical 7,000 mark as it soared over 8 percent at one point. This robust rally was primarily fueled by a significant influx of foreign investment and a palpable rebound in investor risk appetite across the South Korean stock market.

By 2:30 p.m. local time, the Kospi was actively trading around 7,280 points, marking an impressive 6.2 percent increase from its prior close. The index began the trading day strong, opening 3.3 percent higher at 7,082.9, and later peaked at an intraday high of 7,424.18, representing an 8.2 percent climb.

This early, powerful surge activated a buy-side sidecar, a market stabilization measure that temporarily halted program trading for five minutes. At the time of this curb, Kospi 200 futures had already climbed 6.5 percent, reflecting intense market momentum.

Foreign investors were the primary catalysts for this rally, aggressively acquiring a net 2.4 trillion won (approximately $1.61 billion USD) worth of shares by 2:30 p.m. This significant inflow more than doubled their substantial purchases of nearly 1 trillion won from the preceding day. Institutional investors also contributed, adding a net 180 billion won, though their buying pace moderated compared to Tuesday.

In contrast, domestic retail investors were the sole net sellers, offloading nearly 2.5 trillion won worth of Kospi-listed shares amidst the market’s upward trajectory.

The semiconductor sector’s heavyweights spear-headed these impressive gains. Tech giant Samsung Electronics saw its shares climb 5.9 percent to 278,500 won, while memory chip leader SK Hynix recorded a robust 10 percent jump to 2.1 million won. Notably, SK Square, the largest shareholder of SK Hynix and the third-largest company on the Kospi by market capitalization, experienced an even more dramatic ascent, surging by up to 17.5 percent during the trading session.

This broad-based market rally wasn’t limited to tech, extending its reach across other prominent large-cap stocks. Key players like Hyundai Motor saw a 2 percent gain, LG Energy Solution climbed 3 percent, Samsung Life increased by 6.5 percent, and Hanwha Aerospace posted a significant 8.5 percent rise.

The buoyant mood in the local market mirrored the positive momentum seen on Wall Street, which rallied overnight following encouraging signs of easing US inflation. This positive US economic data significantly boosted global investor risk appetite, with semiconductor stocks leading the charge. Across major US indices, the tech-heavy Nasdaq Composite rose 0.9 percent, the Dow Jones Industrial Average edged up 0.02 percent, and the S&P 500 gained 0.38 percent.

Globally, major semiconductor stocks also experienced a strong rally. Nvidia surged 4.06 percent, Micron Technology gained 4.92 percent, Intel rose 4.5 percent, and AMD saw a 2.57 percent increase. The widely-watched Philadelphia Semiconductor Index concluded the session 2.54 percent higher, further underscoring the sector’s strength. Notably, SK Hynix’s US-listed American Depositary Receipts (ADRs) skyrocketed an impressive 27 percent to reach $193.92.

The catalyst for this renewed optimism was the latest US consumer price index (CPI) report for June. US consumer prices increased by 3.5 percent year-over-year, coming in below the anticipated 3.8 percent forecast. Furthermore, on a month-over-month basis, prices actually declined by 0.4 percent, significantly easing market concerns regarding potential future interest rate hikes by the Federal Reserve.

Commenting on the market’s performance, Kang Jin-hyuk, a senior researcher at Shinhan Securities, stated, “Investor risk appetite has demonstrably recovered following the favorable release of the US June CPI data. Both foreign and institutional investors have been instrumental in driving the Kospi significantly higher through sustained net buying for a second consecutive trading session.” He further noted, “At one stage, over 90 percent of all listed stocks were trading positively, clearly indicating that this robust rebound had permeated across the entire broader market.”

Kang also emphasized the importance of upcoming corporate earnings reports. He added that the financial results from leading semiconductor equipment supplier ASML and contract chip manufacturer TSMC, expected this week, will be crucial in determining the sustainability of the current strong rebound observed in chip stocks.

Mirroring the Kospi’s strength, the technology-heavy Kosdaq market also saw significant gains, advancing 4.4 percent to trade around 818 points in the afternoon, successfully reclaiming the psychological 800 level.

The substantial foreign capital inflows also provided strong support for the Korean won. The local currency opened daytime trading at 1,487 per dollar and managed to stay comfortably below the significant 1,500 mark, a level it had breached just a day earlier for the first time in nearly two months.

jwc