KOSPI Soars Above 2700... Making 'New History'

On the 4th, KOSPI opened at 2705.34, up 0.34% (9.12 points) from the previous day

[Asia Economy Reporter Kum Boryeong] The KOSPI has entered the '2700 era' for the first time in its history.

As of 10:10 a.m. on the 4th, the KOSPI recorded 2734.91, up 1.43% (38.69 points) from the previous trading day. The KOSPI opened at 2705.34, up 0.34% (9.12 points) from the previous day, then increased its gains, soaring to 2741.95 at one point during the session.

Over the past two weeks, the KOSPI has repeatedly set new all-time highs. After surpassing the 2600 mark on the 23rd of last month, it broke the record closing price seven times over nine trading days until the previous day. On the 23rd of last month, the KOSPI closed at 2602.59. It then recorded closing prices of 2617.76 on the 24th, 2625.91 on the 26th, 2633.45 on the 27th, 2634.25 on the 1st, 2675.90 on the 2nd, and 2696.22 on the 3rd. If the KOSPI closes in the 2700 range on this day, it will have surpassed 2700 just 10 trading days after breaking 2600.

The KOSPI's high-flying trend was supported by net buying from foreign investors. Over about a month from the 2nd of last month to the previous day, foreign investors purchased 5.797 trillion won worth of stocks in the KOSPI market. An Soeun, a researcher at IBK Investment & Securities, explained, "Despite concerns about overvaluation raised by some, the driving force behind the consecutive new KOSPI highs lies in supply and demand rather than fundamentals," adding, "In particular, foreign investors have rapidly returned nine months after the COVID-19 outbreak, leading the index's rise."

Foreign demand was partly fueled by expectations for the 'COVID-19 vaccine.' Optimism that external demand and trade recovery through the vaccine would be positive for Korea was reflected. Additionally, the dollar weakened, attracting investment funds into the domestic stock market. The won-dollar exchange rate traded at 1089.66 won as of 10:39 a.m., falling below the 1090 won level. This is the lowest level in two and a half years since the intraday low of 1087.30 won on June 15, 2018.

The KOSDAQ index also continued its upward trend, surpassing the 900 mark. The KOSDAQ closing price was 865.12 on the 25th of last month and rose continuously over six trading days, closing at 907.61 the previous day, and stood at 908.43 as of 10:10 a.m. on this day.