Massive foreign buying fuels chip stock rally despite hawkish US Fed signals
A display at Woori Bank in Seoul on Thursday shows the Kospi powering over the 9,000 mark for the first time as of trading's close. The milestone comes a month after it reached the 8,000-point level on May 26. (Yonhap)
South Korea's benchmark Kospi breached the 9,000-point threshold for the first time on Thursday, driven by a rally in chip heavyweights as foreign investors shrugged off the US Federal Reserve's hawkish stance and snapped up more than 1 trillion won ($650 million) in local shares on the main board.
The index closed at 9,063.84, 2.25 percent higher than the previous session. After opening at a 0.23 percent gain on-session, it extended its gains to break above the 9,000-point mark for the first time, climbing as high as 9,106.07. Although it pared some of its gains shortly before the close, the benchmark still finished over 9,000.
The benchmark has been on a blistering rally this year, more than doubling from its Jan. 2 close of 4,309.63. A year earlier, the index was trading below the 3,000-point mark, ending the session at 2,972.19 on June 18, 2025.
The 9,000-point milestone came less than a month after the index first crossed the 8,000 mark on May 26.
The Thursday's breakthrough came even as the US Federal Reserve adopted a hawkish stance at its rate-setting meeting, signaling a higher interest-rate path.
With easing geopolitical tensions following an interim agreement to end fighting between the US and Iran boosting investor sentiment toward Korean equities, semiconductor heavyweights spearheaded the advance.
Market bellwether Samsung Electronics jumped 4.62 percent to 362,500 won.
Shares of SK hynix rose 6.51 percent from the previous session to a record high of 2,685,000 million won, extending gains to a new high just a day after surpassing the 2.5 million won mark for the first time Wednesday. Shortly before the daytime trading's close, the share surged as much as 8 percent to 2,738,000 million won.
The debut of single-stock leveraged exchange-traded funds tied to the two chipmakers further fueled gains by channeling fresh investment into the shares in May.
Other heavyweight stocks posted strong gains as well, with SK Square adding 6.52 percent to 1.7 million won and Samsung Electro-Mechanics jumping 8.27 percent to 2.2 million won.
Foreign buying lifted the index. Offshore investors scooped up shares amounting to 1.27 trillion won on the main board. Retail investors and institutional investors offloaded 375.4 billion won and 777.9 billion won, respectively.
In contrast to the Kospi's rally, the secondary Kosdaq market lagged behind, ending 3.01 percent lower at 1,000.93 and briefly falling below the 1,000-point threshold during the session.
With the Kospi gathering momentum, market analysts project the benchmark index to reach the 10,000-point mark in the near term.
Global investment banks JPMorgan and Morgan Stanley have projected the index to reach the 10,000-point mark under their bullish-case scenarios, while domestic brokerages including KB Securities, Hana Securities and Eugene Investment & Securities have likewise forecast the index to break into five digits.
"The upbeat economy and corporate earnings continue to provide strong momentum despite concerns over higher interest rates," said Lee Kyung-min, an analyst at Daishin Securities.
"Valuation normalization alone could be enough for the Kospi to reach the 10,000-point mark."
silverstar@heraldcorp.com
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