[MarketING] KOSPI Hits New High Led by Semiconductors and Secondary Batteries

KOSPI Rises Over 1% to Reach 2640 Level
Foreign and Institutional Buying Boost Semiconductor and Secondary Battery Stocks

The KOSPI rose to the 2640 level, setting a new yearly high. Large-cap stocks such as semiconductors and secondary batteries showed strong performance, leading both the KOSPI and KOSDAQ to close higher. Buying pressure from foreigners and institutions drove the index gains.

KOSPI Rises to 2640 Level

On the 9th, the KOSPI closed at 2641.16, up 30.31 points (1.16%) from the previous day. The KOSDAQ ended the session at 883.71, up 7.58 points (0.87%). The KOSPI surpassed the 2640 level for the first time this year as the top market capitalization stocks showed broad strength.

[Image source=Yonhap News]

Foreigners and institutions' buying pushed the KOSPI to the 2640 level. On that day, foreigners net purchased 480 billion KRW in the KOSPI market and 99.6 billion KRW in the KOSDAQ market. Institutions also bought 366.5 billion KRW and 126.3 billion KRW in the two markets, respectively. Individuals were net sellers with 823.4 billion KRW and 208.3 billion KRW in the two markets.

Kim Seok-hwan, a researcher at Mirae Asset Securities, said, "The U.S. stock market showed strength in large-cap technology and semiconductor sectors due to a decline in Treasury yields following weak employment data, which had a positive effect on the domestic market." He added, "In particular, the strong performance of semiconductor and secondary battery stocks pushed the KOSPI up by more than 1%."

Semiconductor and secondary battery stocks led the index gains with significant strength. Samsung Electronics closed at 72,200 KRW, up 1.83% from the previous day. SK Hynix rose 4.56%. Researcher Kim explained, "The recent rise in NAND flash prices and SK Hynix's start of mass production of products applying world-class technology from May have reflected expectations for improved earnings, leading to strength in semiconductor stocks." Alongside this, LG Energy Solution rose 3.21%, LG Chem 2.71%, and Samsung SDI 0.82%. In the KOSDAQ market, EcoPro increased by 1.82%, L&F by 1.68%, and Cosmo Advanced Materials by 13.01%. Kim said, "Secondary battery stocks synchronized their rise due to positive factors such as Tesla's expectation of building a new factory in Spain and the early establishment of electric vehicle charging standardization in North America."

Foreigners and institutions also showed buying interest flowing into semiconductor and secondary battery stocks. Foreigners were the largest net buyers of Samsung Electronics with 177.8 billion KRW, followed by SK Hynix (116.3 billion KRW), LG Energy Solution (93 billion KRW), Cosmo Advanced Materials (43.7 billion KRW), and POSCO Future M (35.9 billion KRW). Institutions also net purchased Samsung Electronics (102.8 billion KRW), SK Hynix (58.4 billion KRW), LG Energy Solution (40.6 billion KRW), and Samsung SDI (34.3 billion KRW).

Lingering Concerns Over China's Economic Slowdown

Concerns over China's economic slowdown remain as inflation indicators released that day fell short of expectations.

According to China's National Bureau of Statistics, the consumer price index (CPI) in May rose by 0.2%, below the forecast of 0.4%. It was a slight increase compared to the previous month (0.1%).

The producer price index (PPI) fell 4.6% year-on-year, a larger decline than the previous month (-3.6%). China's PPI inflation rate turned negative in October last year at -1.3%, continuing a negative trend through November (-1.3%), December (-0.7%), January (-0.8%), February, and through May this year.

As concerns over China's economic slowdown persist, expectations for economic stimulus measures are growing. Ryu Jin-yi, a researcher at Hi Investment & Securities, analyzed, "The market expects that China may implement an interest rate cut as early as June, but despite inflation rates low enough to raise deflation concerns, the Chinese government is focusing on targeted support for vulnerable sectors such as low-income groups, easing management difficulties for small and medium enterprises, and stabilizing and expanding employment rather than large-scale interest rate cuts." He added, "Given the burden of widening domestic and foreign interest rate differentials, it is unlikely that the Chinese government will decide on an interest rate cut in June. Since various policies to stimulate domestic demand were announced by local governments at the end of May, it is highly likely that the effects of these policies will be observed through this month."