Seoul: South Korea's key stock index extended its winning streak Friday to a fifth day, topping the 3,000-point mark for the first time in more than three years amid eased concerns over military tensions in the Middle East and policy expectations. The local currency was trading higher against the U.S. dollar.
According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) increased 44.1 points, or 1.48 percent, to close at 3,021.84. This marked the first time the KOSPI reached the 3,000-point threshold since December 28, 2021. The KOSPI first achieved this milestone on January 6, 2021.
Trade volume was substantial at 469.7 million shares worth 17.6 trillion won (US$12.9 billion), with winners outnumbering losers 488 to 388. Foreign investors and institutions purchased local shares worth 554.6 billion won and 37.3 billion won, respectively, while retail investors sold off 594.6 billion won for profit-taking. Experts attributed the upward trend to increased liquidity in global financial markets and expectations that the Lee Jae Myung government's fiscal policy, including a 20.2 trillion-won extra budget plan, will boost the economy.
Lee, who took office earlier this month, has pledged to usher in a 5,000-point era for the KOSPI and eliminate the "Korea discount," a term referring to the undervaluation of South Korean assets due to geopolitical risks or other issues. Park Sang-hyun, an analyst at iM Securities, noted favorable internal news for the stock market, such as a strong policy drive to revitalize the economy and a push to revise the Commercial Act to tackle the Korea discount.
The Lee administration is working to revise the Commercial Act to expand the fiduciary duty of corporate board members, aiming to better protect the interests of minority shareholders. Externally, high global liquidity supported the KOSPI's upward momentum amid hopes that uncertainties surrounding U.S. tariff policies will lessen.
Lee Jae-won, an analyst at Shinhan Securities, pointed out that the KOSPI will face significant junctions in the coming months, with Seoul planning to conclude tariff negotiations with Washington in July and the corporate earnings season approaching. Wall Street was closed overnight for a federal holiday commemorating the end of slavery in the United States.
Semiconductor, IT, and battery shares showed strong performance. Samsung Electronics gained 0.51 percent to 59,500 won, while its chipmaking rival SK hynix jumped 4.47 percent to 257,000 won. South Korea's largest search engine Naver soared 6.94 percent to 269,500 won, and Kakao, the operator of the country's dominant mobile messenger, rallied 10.26 percent to 66,600 won.
Leading battery maker LG Energy Solution surged 4.81 percent to 305,000 won, with its smaller rivals, Samsung SDI and POSCO Future M, climbing 4.82 percent and 2.7 percent to 176,300 won and 129,200 won, respectively. Kakao Pay, a fintech affiliate of Kakao, shot up 29.85 percent to 79,600 won on positive sentiment for the institutionalization of stablecoins, a type of cryptocurrency.
Cosmetics shares also increased due to the new government's plan to support exports of Korean beauty products. Hankook Cosmetics skyrocketed 29.95 percent to 9,460 won, and Tonymoly escalated 18.12 percent to 12,710 won. Amorepacific also advanced 9.15 percent to 145,500 won.
The local currency was quoted at 1,365.6 won against the greenback at 3:30 p.m., up 14.6 won from the previous session. Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys retreated 1.2 basis points to 2.463 percent, and the return on the benchmark five-year government bonds declined 0.4 basis point to 2.636 percent.