KOSPI Recovers to 2400 Level, Will Investor Sentiment Improve?

KOSPI Closes Up 1.39%, KOSDAQ Up 2.00%
Reflecting US-Driven Positive Factors, Focus on Upcoming Earnings Season

[Asia Economy Reporter Kwangho Lee] The KOSPI surpassed the 2400 mark. Expectations for an early pause in the U.S. benchmark interest rate and a soft landing during the holiday period positively influenced the domestic stock market. Foreign investors and institutions supported the index recovery by net buying 797.5 billion KRW in the KOSPI market.

According to the Korea Exchange on the 25th, the KOSPI index closed at 2,428.57, up 33.31 points (1.39%) from the previous trading day. The index opened at 2,426.58, up 31.32 points (1.31%) from the previous close, and at one point during the session rose to 2,432.71. This marks the first time in a week since the 17th that the KOSPI has entered the 2400 range.

In the KOSPI market, foreign investors net bought 768.6 billion KRW and institutions net bought 28.9 billion KRW. Conversely, individual investors net sold 791.8 billion KRW.

[Image source=Yonhap News]

Most of the top market capitalization stocks rose. The rally was led mainly by technology stocks such as semiconductors, secondary batteries, and internet sectors. Samsung Electronics (2.59%), LG Energy Solution (3.09%), SK Hynix (4.34%), LG Chem (4.32%), Samsung SDI (4.85%), Naver (3.06%), and Kakao (2.29%) all closed higher.

The KOSDAQ index also rose, closing at 732.35, up 14.38 points (2.00%) from the previous trading day. Although individual investors sold 337.6 billion KRW alone, foreign investors and institutions bought 153.7 billion KRW and 202.7 billion KRW, respectively.

In the Seoul foreign exchange market, the USD/KRW exchange rate closed at 1,231.70 KRW, down 3.80 KRW from the previous day.

Sangyoung Seo, a researcher at Mirae Asset Securities, explained, “During the holiday period, concerns about economic contraction were highlighted in the U.S. stock market, but the possibility of a 25bp (1bp=0.01 percentage point) rate hike at the February Federal Open Market Committee (FOMC) increased. In particular, the Philadelphia Semiconductor Index, which influences the Korean stock market, rose 7.5%, and the electric vehicle sector also surged significantly, improving investment sentiment toward related stocks.”

Jiyoung Han, a researcher at Kiwoom Securities, analyzed, “The domestic stock market started strong by reflecting positive news from the U.S. during the holiday period. The future direction of stock prices will likely depend on whether the upcoming earnings season will be solid rather than worrisome, similar to the third quarter earnings season.”

However, there are also voices expressing concern about chasing purchases. Kyungmin Lee, a researcher at Daishin Securities, forecasted, “Considering the rise in the U.S. stock market during the holiday, the KOSPI could not only recover the 2,450 level but also attempt to break through the 2,500 level.” He added, “Since there was no new rebound momentum during the holiday, I recommend not to follow with buying approaches in the KOSPI.”