Seoul: The KOSPI, South Korea's benchmark stock index, exceeded the 3,000-point mark for the first time in over three years, driven by heavy trade volume and significant foreign and institutional buying. Trade volume reached 469.7 million shares, valued at 17.6 trillion won (US$12.9 billion), with 488 stocks advancing compared to 388 declining.
According to Yonhap News Agency, foreign investors and institutions purchased local shares worth 554.6 billion won and 37.3 billion won, respectively, while retail investors sold 594.6 billion won in profit-taking efforts. Analysts attribute this surge to increased liquidity in global financial markets and optimistic expectations surrounding the fiscal policies of the newly inaugurated Lee Jae Myung administration, which includes a substantial 20.2 trillion-won extra budget plan aimed at invigorating the economy.
Lee, who assumed office earlier this month, has set ambitious targets, including pushing the KOSPI to a 5,000-point benchmark and eliminating the "Korea discount," a phenomenon where South Korean assets are undervalued due to geopolitical risks and other factors. Internal developments, such as a robust policy drive to stimulate economic growth and plans to revise the Commercial Act to address the Korea discount, have bolstered investor sentiment. Additionally, the potential appreciation of the Korean won has provided further impetus for the stock market.
Externally, high global liquidity has supported the KOSPI's upward trajectory, with hopes that uncertainties surrounding U.S. tariff policies will diminish. Lee Jae-won, an analyst at Shinhan Securities, noted that the KOSPI is poised for critical junctures in the coming months, with Seoul aiming to finalize tariff negotiations with Washington by July and the corporate earnings season on the horizon.
Key sectors leading the rally included semiconductors, IT, and batteries. Samsung Electronics saw a modest gain of 0.51 percent, SK hynix surged 4.47 percent, and LG Energy Solution rose 4.81 percent. Meanwhile, the fintech sector also experienced robust growth, with Kakao Pay soaring 29.85 percent on optimism surrounding the institutionalization of stablecoins.
Cosmetic stocks rallied as well, bolstered by the government's plans to support the export of Korean beauty products. Hankook Cosmetics and Tonymoly experienced significant gains, while Amorepacific also advanced.
The South Korean won strengthened against the U.S. dollar, quoted at 1,365.6 won per dollar, up 14.6 won from the previous session. Bond prices, which move inversely to yields, saw gains as well, with the yield on three-year Treasurys retreating and the return on five-year government bonds declining.