On October 2, the KOSPI broke through the 3,500 mark for the first time, just two weeks after surpassing 3,400, fueling speculation that the benchmark index is now racing toward the symbolic “KOSPI 5,000 era.”
The index closed at 3,549.21, up 93.38 points, or 2.70%. After opening 2.02% higher at 3,535.48, the KOSPI steadily gained ground, repeatedly setting fresh intraday records and climbing as high as 3,565.96 at one point, briefly approaching the 3,600 threshold.
The rally was driven largely by robust foreign buying. On the main bourse, foreigners net purchased 3.14 trillion won worth of equities, sharply boosting the index. Retail investors sold a net 3.07 trillion won, locking in profits, while institutions net sold 69 billion won overall, despite pension funds buying 45 billion won.
Investor sentiment was lifted by expectations that weak U.S. economic data would accelerate the Federal Reserve’s interest rate-cutting cycle, weighing on the dollar and supporting a stronger won. The September ADP National Employment Report showed U.S. private payrolls fell by 32,000 from the previous month, far below market expectations of a 50,000 increase. The ISM manufacturing PMI came in at 49.1, up slightly from 48.7 in August but still below the 50 threshold that separates expansion from contraction.
Confidence was further buoyed by news that OpenAI CEO Sam Altman, currently visiting Seoul, had formed a strategic partnership with Samsung Electronics (005930) and SK hynix (000660) to build out the global AI infrastructure project known as “Stargate.”
Despite the won-dollar exchange rate remaining elevated in the 1,400 range, foreign investors poured into Korean equities. Samsung Electronics surged as much as 5% intraday to 90,300 won, while SK hynix soared 12.36% to an all-time high of 404,500 won.
Brokerages struck an optimistic tone, predicting the index would maintain its upward trajectory through year-end. According to financial data provider FnGuide, KB Securities projected the KOSPI would trade between 3,200 and 3,800 in the fourth quarter, while Daol Investment & Securities offered a more conservative range of 3,030 to 3,650. A recent Yonhap survey of 13 research heads from major brokerages found most expected the index to peak around 3,600 this year. Some analysts now suggest the range may need to be revised upward amid earnings upgrades for listed firms in the third quarter.
Still, concerns remain that the rally is overly reliant on foreign inflows, with retail participation noticeably absent. Data from the Korea Exchange showed that despite the KOSPI’s sharp rise in the third quarter, domestic investors offloaded more than 18 trillion won worth of equities, marking the largest net selling since records began in 1998.
From July through September 30, retail investors sold a net 18.43 trillion won on the main board. The turnover ratio of KOSPI-listed shares in September stood at just 0.58%, near the lowest level of the year, reflecting sluggish trading activity among individuals.
Lee Jae-won, analyst at Shinhan Investment & Securities, said, “Even on the eve of the Chuseok holiday closure, foreign investors extended their buying streak in Samsung Electronics to 15 straight sessions, showing little concern for long-holiday risks. Retail investors, however, have yet to join the index’s record-setting rally, with outstanding deposits still around 76 trillion won.”
On October 2, the KOSPI broke through the 3,500 mark for the first time, just two weeks after surpassing 3,400, fueling speculation that the benchmark index is now racing toward the symbolic “KOSPI 5,000 era.”
The index closed at 3,549.21, up 93.38 points, or 2.70%. After opening 2.02% higher at 3,535.48, the KOSPI steadily gained ground, repeatedly setting fresh intraday records and climbing as high as 3,565.96 at one point, briefly approaching the 3,600 threshold.
The rally was driven largely by robust foreign buying. On the main bourse, foreigners net purchased 3.14 trillion won worth of equities, sharply boosting the index. Retail investors sold a net 3.07 trillion won, locking in profits, while institutions net sold 69 billion won overall, despite pension funds buying 45 billion won.
Investor sentiment was lifted by expectations that weak U.S. economic data would accelerate the Federal Reserve’s interest rate-cutting cycle, weighing on the dollar and supporting a stronger won. The September ADP National Employment Report showed U.S. private payrolls fell by 32,000 from the previous month, far below market expectations of a 50,000 increase. The ISM manufacturing PMI came in at 49.1, up slightly from 48.7 in August but still below the 50 threshold that separates expansion from contraction.
Confidence was further buoyed by news that OpenAI CEO Sam Altman, currently visiting Seoul, had formed a strategic partnership with Samsung Electronics (005930) and SK hynix (000660) to build out the global AI infrastructure project known as “Stargate.”
Despite the won-dollar exchange rate remaining elevated in the 1,400 range, foreign investors poured into Korean equities. Samsung Electronics surged as much as 5% intraday to 90,300 won, while SK hynix soared 12.36% to an all-time high of 404,500 won.
Brokerages struck an optimistic tone, predicting the index would maintain its upward trajectory through year-end. According to financial data provider FnGuide, KB Securities projected the KOSPI would trade between 3,200 and 3,800 in the fourth quarter, while Daol Investment & Securities offered a more conservative range of 3,030 to 3,650. A recent Yonhap survey of 13 research heads from major brokerages found most expected the index to peak around 3,600 this year. Some analysts now suggest the range may need to be revised upward amid earnings upgrades for listed firms in the third quarter.
Still, concerns remain that the rally is overly reliant on foreign inflows, with retail participation noticeably absent. Data from the Korea Exchange showed that despite the KOSPI’s sharp rise in the third quarter, domestic investors offloaded more than 18 trillion won worth of equities, marking the largest net selling since records began in 1998.
From July through September 30, retail investors sold a net 18.43 trillion won on the main board. The turnover ratio of KOSPI-listed shares in September stood at just 0.58%, near the lowest level of the year, reflecting sluggish trading activity among individuals.
Lee Jae-won, analyst at Shinhan Investment & Securities, said, “Even on the eve of the Chuseok holiday closure, foreign investors extended their buying streak in Samsung Electronics to 15 straight sessions, showing little concern for long-holiday risks. Retail investors, however, have yet to join the index’s record-setting rally, with outstanding deposits still around 76 trillion won.”