[Market ING] KOSPI Recovers 2,800, Further Gains Expected Amid Rotational Trading

Last week, the KOSPI recovered the 2,800-point mark amid expectations for the new government. It surpassed the 2,800 level just one week after reclaiming the 2,700 mark. With the KOSPI maintaining strong gains of over 4% for two consecutive weeks, attention is focused on how much further it can climb this week (June 9-13).

Yonhap News Agency

Last week, the KOSPI rose by 4.24% and the KOSDAQ by 2.98%. Shin Seungjin, a researcher at Samsung Securities, stated, "The KOSPI broke through the 2,800 level, marking a new yearly high. It has surged more than 20% in just two months from its low point below 2,300 in April, showing the strongest performance among major global stock markets." He further analyzed, "This is due to a combination of factors: the reduced market impact of U.S. tariff policies, the inflow of foreign capital driven by a stronger won, and expectations for policies to revitalize the domestic stock market."

Kang Jinhyuk, a researcher at Shinhan Investment Corp., commented, "The KOSPI showed strong upward momentum, supported by expectations of political stability. As hopes for U.S.-China negotiations grew, semiconductors, including Nvidia, performed strongly, leading to a rebound in domestic semiconductor stocks. Financial stocks, particularly securities firms, continued to rise on expectations of capital market advancement. Liquidity-driven stocks such as construction and policy-driven stocks such as holding companies also gained, with many reaching new 52-week highs."

The market outlook suggests that the KOSPI's upward trend will continue, driven by rotational trading. Lee Kyungmin, a researcher at Daishin Securities, said, "There is a possibility of short-term overshooting for policy beneficiaries such as banks, securities, and holding companies. As stock prices have surged since April, much of the policy optimism has already been priced in, so a period of short-term overheating correction and supply absorption is expected. During this process, the KOSPI can continue its upward trend through rebounds in previously neglected stocks and rotational trading."

In particular, foreign investors are leading the market rally. After a streak of net selling in the stock market since August last year, foreign investors ended this trend last month after 10 months and turned into net buyers. On June 4, they made net purchases of about 1 trillion won in the stock market?the first time since August 2024 that foreign investors bought more than 1 trillion won in a single day. So far this month, foreign investors have bought 2.1676 trillion won. Lee noted, "There is a clear improvement in foreign investor inflows. President Lee Jaemyung has pledged to resubmit the Commercial Act amendment within two to three weeks, and the acceleration of policy implementation has driven further gains in already undervalued sectors. At the center of this is large-scale buying by foreign investors." He added, "With expectations for stronger policies and additional upward pressure on the won, the environment is set for an acceleration of foreign funds flowing into the market."

Shin commented, "Currently, inflows are centered on export growth and policy beneficiary stocks, as well as sectors undergoing valuation reassessment. If the stronger won brings in additional foreign investor inflows, buying will spread to undervalued sectors such as semiconductors, automobiles, finance, and holding companies. Now is the time for funds to be invested in the Korean market."

This week, key events include the release of China's May export-import data and May CPI and PPI on June 9, Korea's June 1-10 export-import trends and the U.S. May CPI on June 11, and the U.S. June Michigan Consumer Sentiment Index on June 13. In addition, Apple's Worldwide Developers Conference (WWDC) will be held from June 9-13, and Tesla's Robotaxi will be launched on June 12.

Lee predicted, "The U.S. May CPI is expected to rebound to 2.5% from 2.3% the previous month, marking the first increase in four months, and core CPI is also expected to rise to 2.9% from 2.8%. This suggests that the impact of tariffs on prices will begin to be reflected from May. However, as concerns over tariffs have already peaked and if the inflation rate is not significantly higher than the already anticipated concerns, the market impact will likely be limited."