Both Major Indices Close Up Nearly 2%
KOSPI Hits 3,814.69, Reaches Uncharted Territory
Tax Reform Talks Fuel Expectations of Capital Moving Into the Stock Market
On October 20, the KOSPI broke through the 3,810 mark and closed at an all-time high. The index has risen by 11.39% just this month, continuing its upward rally. This surge is interpreted as being driven by expectations of a 'money move' into the stock market, following discussions about tax reforms that could have significant ripple effects on the real estate market.
On this day, the KOSPI closed at 3,814.69, up 1.76% from the previous trading day. After starting strong at 3,775.40, the index briefly turned downward in the morning but quickly resumed its upward trajectory. At 11:41 a.m., it surpassed the 3,800 mark for the first time in history and continued to climb, finishing the session at a record high. Compared to the closing price of 3,424.60 on September 30, the index has surged by 11.39%, maintaining a steep upward rally.
While foreign investors and individuals were net sellers, institutional buying led the index higher. Institutional investors recorded a net purchase of 544.3 billion won, while foreign investors and individuals net sold 219.5 billion won and 361.6 billion won, respectively, realizing profits.
Nearly all sectors posted gains. The securities sector soared by as much as 10.61%. Other sectors with more than 1% gains included finance (3.27%), transportation equipment and parts (2.46%), medical and precision instruments (2.27%), insurance (1.83%), entertainment and culture (1.69%), electrical and electronics (1.68%), manufacturing (1.67%), textiles and apparel (1.54%), pharmaceuticals (1.45%), machinery and equipment (1.31%), chemicals (1.23%), IT services (1.20%), and food, beverages, and tobacco (1.11%). Only the electric and gas sector (-0.84%) and distribution (-0.39%) declined.
The top 10 stocks by market capitalization also showed sharp gains. Hanwha Aerospace and SK Hynix rose by 4.6% and 4.5%, respectively. Many others, such as KB Financial Group (3.0%), Hyundai Motor (2.0%), Kia (2.0%), and Samsung Biologics (1.3%), gained more than 1%. LG Energy Solution was the only stock among the top 10 by market capitalization to fall, declining by 0.4%.
The KOSDAQ also maintained a strong performance. After opening firm at 864.98, it continued to rise and closed at 875.77, up 1.89% from the previous trading day.
Unlike the KOSPI market, foreign investors and institutions were net buyers in the KOSDAQ, purchasing 145.8 billion won and 60 billion won, respectively. Individuals were net sellers, offloading 197.5 billion won.
Again, most sectors posted gains. Sectors that rose by more than 1% included finance (4.20%), pharmaceuticals (3.33%), textiles and apparel (3.25%), manufacturing (1.97%), transportation equipment and parts (1.67%), general services (1.63%), distribution (1.59%), entertainment and culture (1.33%), telecommunications (1.21%), IT services (1.15%), and chemicals (1.00%). Only non-metallic minerals (-0.45%) and paper and wood (-0.22%) closed slightly lower.
Most of the top 10 stocks by market capitalization also posted strong gains of around 5%. Pharmaresearch (8.8%), Peptron (7.5%), Ecopro (6.4%), Rainbow Robotics (6.3%), HLB (4.1%), LigachemBio (3.9%), Alteogen (2.1%), and ABL Bio (2.0%) recorded the largest increases in order. Ecopro BM was the only one to fall, declining by 0.4%.
Lee Kyungmin, a researcher at Daishin Securities, explained, "US regional banks reported solid earnings, easing concerns over bad loans, and expectations for US-China negotiations have further contributed to a positive global market sentiment. In the domestic market, optimism grew that the results of Korea-US trade negotiations would be announced before the Asia-Pacific Economic Cooperation (APEC) event at the end of this month. Additionally, government officials made statements regarding tax reforms with significant implications for the real estate market, further fueling expectations of a 'money move' into the stock market and driving the overall upward trend."
On the 20th, the KOSPI index and others are displayed on the status board of Hana Bank dealing room in Jung-gu, Seoul. Photo by Yonhap News
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