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 worries over military tensions in the Middle East and policy expectations. The local currency was trading sharply 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. It marked the first time the KOSPI hit the 3,000-point threshold since January 3, 2022. The KOSPI surpassed the milestone for the first time ever in its history on January 6, 2021.
Trade volume was heavy at 469.7 million shares worth 17.6 trillion won (US$12.9 billion), with winners outnumbering losers 488 to 388. Foreigners and institutions purchased local shares worth 554.6 billion won and 37.3 billion won, respectively, while retail investors unloaded 594.6 billion won for profit taking.
Experts attributed the upward trend to increased liquidity in the 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 address the Korea discount issue, which refers to investors' tendency to undervalue South Korean assets due to geopolitical risks or other issues.
"Internally, there was favorable news for the stock market, such as a strong policy drive to revitalize the economy, a push to revise the Commercial Act to tackle the Korea discount and a possible appreciation of the Korean won," Park Sang-hyun, an analyst at iM Securities, said. The Lee administration has been pushing to revise the Commercial Act to expand the fiduciary duty of corporate board members to better protect the interests of minority shareholders.
"Externally, high global liquidity helped the KOSPI's upward momentum amid hopes that uncertainties surrounding U.S. tariff policies will diminish," he added. Wall Street was closed overnight for a federal holiday commemorating the end of slavery in the United States.
Semiconductor, IT, and battery shares were particularly strong. Tech giant 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, rose 29.85 percent to 79,600 won on optimism for the institutionalization of stablecoins, a type of cryptocurrency.
Cosmetics shares also rallied 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., sharply up 14.6 won from the previous session.