KOSPI and KOSDAQ Both Rise... Large-Scale Buying by Foreigners and Institutions

KOSPI Up 6.60%, KOSDAQ Up 5.97%
Foreign Investors Turn Net Buyers on KOSPI After 9 Sessions
"Ongoing U.S.-China Tensions Must Be Closely Watched"

The KOSPI closed with a sharp rise of over 6% on the 10th. U.S. President Donald Trump's tariff suspension measures and the rebound in the New York stock market stimulated the investment sentiment of foreigners and institutions toward the Korean stock market.

On that day, the KOSPI closed at 2,445.06, up 151.30 points (6.60%) from the previous day. The index opened at 2,395.13, up 101.40 points (4.42%), and maintained an upward trend throughout the session. Foreigners and institutions led the index rise by net buying 324.4 billion KRW and 676.2 billion KRW worth of stocks, respectively. Individuals net sold stocks worth 1.072 trillion KRW.

All of the top market capitalization stocks in the KOSPI showed strong gains. LG Energy Solution (11.31%), SK Hynix (11.03%), HD Hyundai Heavy Industries (10.39%), Meritz Financial Group (8.16%), Kakao (7.67%), Hanwha Aerospace (7.09%), KB Financial Group (7.05%), Hanwha Ocean (6.56%), Krafton (6.49%), Samsung Electronics (6.42%), Celltrion (6.28%), Samsung Electronics Preferred (5.64%), Shinhan Financial Group (5.50%), Kia (5.25%), Samsung C&T (5.08%), Hyundai Motor Company (5.06%) all showed significant gains.

By sector, most industries showed strong gains including electronics (8.49%), machinery equipment (8.21%), chemicals (7.32%), manufacturing (7.20%), insurance (6.33%), transportation equipment parts (6.25%), medical precision instruments (6.16%), transportation and warehousing (6.15%), and finance (6.12%).

On the 10th, at the Hana Bank headquarters in Jung-gu, Seoul, dealers were working as the KOSPI index surged over 5% in early trading following news of the U.S. mutual tariff suspension, triggering a buy-sidecar. On the same day, the won-dollar exchange rate opened at 1,446 won, down 38.1 won from the previous trading day.

The sharp rise in the stock market triggered a buy-sidecar (program trading buy order suspension). This was the first time in about eight months since August 6 last year, when the global stock market rebounded after a sharp drop (Black Monday). This contrasts with the sell-sidecar triggered by the KOSPI's plunge the previous day.

Lee Jaewon, a researcher at Shinhan Investment Corp., said, "With tariff concerns easing, foreigners who had been net sellers for nine consecutive trading days in the KOSPI market switched to net buyers, and most sectors expanded their gains. In particular, large-cap stocks such as semiconductors, secondary batteries, automobiles, industrials, and finance surged."

The KOSDAQ index also closed at 681.79, up 38.40 points (5.97%) from the previous session. The index opened at 670.12, up 26.73 points (4.15%). Foreigners and institutions net bought stocks worth 109.6 billion KRW and 201.1 billion KRW, respectively, while individuals net sold stocks worth 299.3 billion KRW.

Most of the top market capitalization stocks in the KOSDAQ also rose sharply. Stocks such as Voronoi (13.99%), Classys (11.65%), Peptron (11.04%), EcoPro (9.62%), EcoPro BM (9.29%), PharmaResearch (8.57%), HPSP (8.14%), ABL Bio (7.98%), Hugel (7.75%), Rainbow Robotics (7.02%), Samchundang Pharm (6.97%), and Ligachem Bio (6.30%) soared. As valuation (stock price relative to corporate value) and technical attractiveness stood out, the gains expanded in sectors such as bio, secondary batteries, and semiconductor materials, parts, and equipment, which are among the top market capitalization sectors.

Kim Jiwon, a researcher at KB Securities, said, "The suspension of mutual tariffs, which had raised concerns, brought relief to the market. Bill Ackman, who raised the possibility of tariff suspension last weekend, positively evaluated the tariff suspension, saying, 'On behalf of all Americans, thank you,' and Goldman Sachs withdrew its recession forecast." Ackman, chairman of the hedge fund Pershing Square, is also known as a 'supporter of President Trump.'

However, Kim also pointed out, "We must continuously monitor the possibility of increased market volatility due to the nature of the U.S.-China conflict." He added, "China was excluded from the tariff suspension measures. After the U.S. raised tariffs on China to 104%, China also raised its tariffs by 50%, and the U.S. finally announced a 125% tariff. Although China expressed a tough stance through its trade white paper, it basically stated that negotiations are open, so whether negotiations between the two countries will take place in the future will determine the market direction."