KOSPI Closes Above 3,400 for First Time on Eased Capital Gains Tax and Semiconductor Rally

Government Announces Capital Gains Tax Threshold for Major Shareholders to Remain at 5 Billion Won
Securities and Semiconductor Stocks Rally, While Auto and Shipbuilding Sectors Lose Steam

The KOSPI index closed higher after surpassing the 3,400 mark for the first time in history. The rally to new record highs continued, driven by the announcement to maintain the capital gains tax threshold for major shareholders at 5 billion won and the strength in the semiconductor sector.

On September 15, the KOSPI index finished trading at 3,407.31, up 11.77 points (0.35%) from the previous session. The index started the day at 3,407.78, up 12.24 points (0.36%), and fluctuated throughout the session before closing slightly higher above the 3,400 level. This marked the tenth consecutive trading day of gains, with foreign investors also net buyers for the sixth straight session. Foreign investors alone purchased 266.9 billion won worth of shares, while individuals and institutions sold 136.8 billion won and 136.2 billion won worth of shares, respectively.

On the 15th, when the KOSPI index, which has been recording consecutive all-time highs, surpassed the 3400 mark for the first time in history, dealers were working in the dealing room at the Hana Bank headquarters in Jung-gu, Seoul. Photo by Kang Jinhyung

Among the top stocks by market capitalization, Samsung C&T (up 7.05%), Samsung Electronics Preferred (up 1.64%), Samsung Electronics (up 1.46%), Shinhan Financial Group (up 0.87%), and SK Hynix (up 0.76%) posted gains. In contrast, Kia (down 3.97%), Hyundai Motor (down 3.80%), Doosan Enerbility (down 3.61%), Hanwha Ocean (down 3.27%), Kakao (down 2.29%), HD Hyundai Heavy Industries (down 2.25%), Hanwha Aerospace (down 1.60%), Hyundai Mobis (down 1.28%), and HD Korea Shipbuilding & Offshore Engineering (down 1.20%) ended lower.

By sector, securities (up 3.91%), retail (up 3.55%), medical precision instruments (up 2.49%), finance (up 1.78%), electrical and electronics (up 0.91%), and construction (up 0.82%) rose. On the other hand, transportation equipment and parts (down 2.36%), logistics (down 2.22%), machinery and equipment (down 1.92%), and entertainment and culture (down 1.29%) declined.

Kim Jiwon, a researcher at KB Securities, said, "Securities stocks were strong as the capital gains tax threshold for major shareholders was maintained at the current 5 billion won. Expectations for amendments to the Commercial Act, such as the possibility of adjusting the highest tax rate on separated dividend income, also boosted financial and holding companies." She added, "Samsung Electronics, SK Hynix, and semiconductor materials, parts, and equipment stocks continued their upward trend. Some robotics stocks also surged on news that President Lee Jaemyung was discussing regulatory reforms for new industries such as robotics."

She continued, "Regarding tariff negotiations with the United States, there are reported disagreements between the two countries over the method of investing 350 billion dollars (about 486 trillion won) in the United States. The news of the difficult negotiations weighed on auto stocks, which are typical export stocks. The shipbuilding and nuclear power sectors also showed weak performance."

The KOSDAQ index closed at 852.69, up 5.61 points (0.66%) from the previous session. The index opened at 849.64, up 2.56 points (0.30%), and extended its gains in the afternoon. Foreign investors and institutions sold 158.1 billion won and 37.3 billion won worth of shares, respectively, while individuals bought 137.9 billion won worth.

Among the top KOSDAQ stocks by market capitalization, Caregen (up 10.61%), Leeno Industrial (up 2.14%), Hugel (up 1.72%), Ecopro BM (up 1.68%), Rainbow Robotics (up 1.53%), and EO Technics (up 0.92%) rose. In contrast, Voronoi (down 4.32%), PharmaResearch (down 2.80%), Kolon TissueGene (down 2.42%), Samchundang Pharm (down 1.18%), SM Entertainment (down 1.12%), ABL Bio (down 1.04%), HLB (down 1.02%), and JYP Entertainment (down 0.91%) declined.

Researcher Kim said, "Ahead of this week's Federal Open Market Committee (FOMC), where a rate cut is widely expected, the domestic stock market continued its record-setting rally. The desire to realize profits and the inflow of additional buying could lead to a search for direction. After this week's monetary policy meeting, whether the market enters a rate-cutting 'cycle,' in other words, the outlook for the monetary policy path, will be a key variable for the stock market's direction."