KOSPI Surges 30% This Year, Outperforming Global Markets [First Half Market Review]

KOSPI up 29.54% so far this year
Largest increase among G20 countries
KOSDAQ also rises over 17%, ranking among the top performers
Investor sentiment improves on expectations for new government
Return of foreign investors drives stock market rally

The KOSPI has surged nearly 30% so far this year, recording an overwhelming rate of increase among the G20 countries. Despite uncertainty factors such as tariff risks and geopolitical risks originating from the Middle East since the beginning of the year, the index impressively rebounded to the 3000 level for the first time in three and a half years.

KOSPI up about 30% this year... KOSDAQ also rises more than 17%

According to the Korea Exchange on June 27, as of June 25, the KOSPI had risen 29.54% compared to the end of last year. The index, which had been in the 2300 range, climbed above the 3100 mark. This rate of increase is the highest among G20 countries. Russia followed with 25.87%, Germany with 18.03%, South Africa with 16.44%, and Italy with 15.01%. During the same period, the US Dow Jones rose only 1.03%, the Nasdaq gained 3.43%, and Japan's Nikkei 225 fell 2.39%. China's Shanghai Composite Index rose 3.11%, and India's Sensex climbed 5.91%. The KOSDAQ also posted a strong performance, rising 17.7% and ranking among the top in returns.

After falling nearly 10% last year and performing the worst among global stock markets, the KOSPI has shown a completely different picture this year. Internally, the resolution of political uncertainty and expectations for the launch of a new government have supported the market. As a result, the market was able to quickly recover from shocks caused by external variables such as tariff issues and geopolitical risks from the Middle East. Although the market experienced a correction in March and April due to tariff issues, it quickly rebounded and continued its upward trend. In May, the return of foreign investors, who had been net sellers since August last year, accelerated the rally even further.

An official from the Korea Exchange analyzed, "The market turned upward this year due to inflows of bottom-fishing demand at the start of the year and tariff deferrals by the Donald Trump administration, and the rally continued after the presidential election. With the launch of the new government, political uncertainty was resolved, and expectations for stock market stimulus measures improved investor sentiment."

As the stock market rally continued, trading volume also increased. The average daily trading value this month exceeded 22 trillion won. This is the first time since March last year that the average daily trading value has surpassed 22 trillion won in a month. The market capitalization of the KOSPI exceeded 2,500 trillion won for the first time ever, and the KOSDAQ surpassed 400 trillion won this month. As of June 25, the combined market capitalization of the two markets reached 2,959.5134 trillion won, putting the 3,000 trillion won milestone within reach.

'Jigeumjobangwon' leads the charge to 3,000

The leading stocks driving this year's market rally are referred to as 'Jigeumjobangwon,' which stands for holding companies, financials, shipbuilding, defense, and nuclear power. Shipbuilding and defense stocks led the market's rise from the beginning of the year, and later, holding companies, financials, and nuclear power stocks joined the rally on policy expectations.

Hyundai Rotem, a defense stock, soared 285.92% this year. Doosan Enerbility, a nuclear power stock, jumped 274.93%. Other notable gainers in the holding company, financial, shipbuilding, defense, and nuclear power sectors included Hanwha (242.75%), Mirae Asset Securities (192.03%), Hanwha Aerospace (166.25%), Doosan (161.57%), Poongsan (161.06%), Hanwha Systems (160.62%), and HD Hyundai Marine Engine (114.31%), all posting triple-digit gains.

Shin Seungjin, head of investment information at Samsung Securities, analyzed, "From the beginning of this year, the rally in leading sectors such as shipbuilding, defense, and nuclear power spread to new growth industries like cosmetics and entertainment. In addition, low-valuation stocks in construction, retail, finance, and conglomerates (holding companies) also showed strong momentum day after day."

In terms of market participants, different groups took turns as net buyers, supporting the market's rise. So far this year, institutions have been net buyers of 4.5506 trillion won in the domestic stock market, while individuals bought 971.4 billion won. In contrast, foreigners were net sellers of 11.3497 trillion won. At the start of the year, institutions' net buying supported the market, but since May, foreigners have turned to net buying, driving the sharp rise in the index. In particular, foreigners had been net sellers in the KOSPI market for nine consecutive months from August last year to April this year, but switched to net buying in May. Foreigners recorded net purchases of over 1 trillion won in May, and this month, they expanded their net buying to 4.7 trillion won.