Seoul: South Korea's benchmark stock index rose at the fastest pace among the Group of 20 (G20) nations' key equity indices this year, driven by strong foreign buying of semiconductors and other domestic blue chip stocks, data showed Monday. The benchmark Korea Composite Stock Price Index (KOSPI) rose 68.5 percent, or 1,643.89 points, from Jan 2. to Monday, according to the data from Yonhap Infomax, the financial arm of Yonhap News Agency.
According to Yonhap News Agency, the KOSPI was the only G20 stock index to rise by more than 60 percent over the cited period. The second-highest performing stock gauge was the Nikkei 225 index of Japan, which rose 26.61 percent in the same 10-month period. Such a rapid rise of the KOSPI was driven by strong buying from foreign investors as they snatched up market heavyweights, including semiconductor shares, analysts here said.
Foreigner investors net purchased a total of 5.2 trillion won (US$3.6 billion) worth of stocks in the local market from the start of this month until Friday, according to the data from the Korea Exchange (KRX), the country's leading stock bourse operator. Their total amount of purchases was more than double that of institutional investors, which totaled 2.5 trillion won.
"Foreign investors became active net buyers amid anticipation that semiconductors will benefit from a turnaround in the artificial intelligence investment cycle and a positive outlook for the government's stock market boosting measures," said Choi Kwang-hyuk, an analyst at LS Securities Co. On Monday, the KOSPI closed at a new high of 4,042.83 points, surpassing the 4,000 mark for the first time.
Top-cap shares also soared to new highs, with chip giant Samsung Electronics topping 100,000 won for the first time, while SK hynix closing up 4.9 percent at 535,000 won. Analysts here expected the KOSPI's bullish run to continue for some time but warned of potential short-term fluctuations.
"The KOSPI is expected to maintain its uptrend until the early half of 2026," said Kim Young-il, an analyst at Daishin Securities Co. "But as we enter a phase where investors start to verify the momentum that has driven the upward trend in global stock markets, local stocks will inevitably experience short-term fluctuations or will have to absorb selling pressures."
Following the market close, the KRX held an event to celebrate the KOSPI's new record high. "The market energy, which has been weighed down for some time, is becoming normalized due to the government's market-focused policies and efforts from participants," said Jeong Eun-bo, the chairman of the KRX. "Now we have to head toward an era where the KOSPI reaches 5,000 and the index surpassing the 4,000 mark is a new beginning in that journey," he added.