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Korea Herald
01-07-2025
- Business
- Korea Herald
Kospi hits fresh high on easing global trade tensions, strong exports
Market watchers see room for further gains on Q2 earnings and policy tailwinds South Korea's Kospi climbed to a fresh annual high Tuesday, buoyed by overnight gains on Wall Street and optimism over easing global trade tensions. The benchmark index opened 0.58 percent higher at 3,089.64 and briefly surpassed the 3,130 mark around 9:35 a.m. It extended gains to reach 3,133.52 by 10:20 a.m., up 2 percent and exceeding its previous peak of 3,129.09 set last Wednesday — the highest level in nearly four years. Buying momentum was strong Tuesday morning, with the index hovering around 3,130. However, the rally lost steam in the afternoon, with the Kospi eventually drifting toward 3,090 by the close. Foreigners returned to net buying on Tuesday after four straight sessions of heavy selling, during which they offloaded 2.2 trillion won ($1.6 billion) in Kospi shares. By 3:30 p.m., they had net purchased over 100 billion won, with their buying fluctuating notably throughout the session. Foreigners trailed institutional investors, who led the rally with a net purchase of over 500 billion won. Retail investors turned net sellers, unloading about 650 billion won to lock in gains. The Kosdaq also posted modest gains, opening 0.42 percent higher at 784.8 and climbing to an intraday peak of 788.38. Institutional investors were net buyers, while retail and foreign investors trimmed their positions. Equities drew support from a strong overnight performance in US markets, where the S&P 500 closed at a record 6,207.95 and the tech-focused Nasdaq hit 20,369.73. Analysts attributed Wall Street's gains to optimism ahead of second-quarter earnings and easing trade tensions, including Canada's withdrawal of a planned digital tax and a 2 percent jump in Apple shares on AI momentum. Investor sentiment in Seoul was further lifted by robust export figures and rising expectations for market-friendly regulatory reforms. 'Korea's exports rose 4.3 percent on-year in June, with semiconductors hitting an all-time high and autos marking their strongest June on record,' said Lee Jae-won, a strategist at Shinhan Securities. 'On top, a proposed amendment to the Commercial Act is being tabled at the Legislation and Judiciary Committee today, and opposition parties that once opposed it are shifting stance, raising expectations for its passage this week.' The ruling Democratic Party of Korea is pushing to revise the Commercial Act to improve corporate governance and bolster minority shareholder rights, aiming to pass the bill before the June provisional parliamentary session ends this week. Han Ji-young, an analyst at Kiwoom Securities, said it is too soon to call an end to the market's upward momentum. 'There are still several potential upside catalysts this month, including the impact of Trump's universal tariffs, the second-quarter earnings and the details of the Commercial Act amendment,' he said. 'The recent pullback in Korean equities should be seen as a period of consolidation (not a trend reversal).'
Korea Herald
15-06-2025
- Business
- Korea Herald
Mideast tensions test Kospi rally
Rising global volatility triggered by escalating military tensions in the Middle East poses fresh risks for Korea's export-reliant economy, already under strain from growing trade protectionism and US tariff hikes. In May, Korean exports declined for the first time in four months, signaling that global trade friction is beginning to weigh on the economy. 'A prolonged surge in oil prices could further jeopardize growth, which is already projected to fall below 1 percent this year,' said Jung Kyu-chul, head of economic forecasting at the Korea Development Institute. 'Higher oil prices will squeeze manufacturers by raising import and production costs, delivering a direct blow not just to industry, but to domestic demand and the broader economy.' The benchmark Kospi, which had been leading G20 equity markets, snapped its rally on Friday as investor sentiment was rattled by Israel's airstrikes on Iran, sparking fears of a wider regional conflict. The Kospi dropped 0.87 percent after touching a three-year high of 2,920 on Thursday. From May 12 to June 14, the index surged 11 percent—from 2,607.3 to 2,894.6 — outpacing Indonesia's 4.88 percent gain and Canada's 4.24 percent rise. The rally had been fueled by renewed optimism following the June 4 inauguration of President Lee Jae-myung, which ended a six-month political stalemate and triggered a return of foreign capital after 10 straight months of net outflows. But Friday's geopolitical shock reverberated across markets. Brent crude jumped more than 10 percent intraday — its largest spike since 2022 — before settling up 7 percent. West Texas Intermediate rose 7.62 percent, stoking fears of supply disruptions. Safe-haven demand surged. Gold climbed 1.6 percent to $3,457 an ounce in New York, while Korean gold prices rose 2.34 percent to 150,530 won per gram, breaching the 150,000-won mark for the first time since early May. The Korean won weakened, touching an intraday low of 1,371 against the US dollar before closing at 1,369.6. Despite the volatility, analysts say the local market should weather the storm unless the conflict intensifies. 'As long as the Israel-Iran conflict doesn't evolve into a full-scale war, the impact on local markets is likely to remain limited,' said Shin Seung-hwan, analyst at Samsung Securities. 'Given the recent steep rally, the tensions could prompt a short-term correction, but any pullback is expected to remain modest.' Still, with no signs of de-escalation, caution is warranted. 'We need to stay alert to deepening geopolitical tensions,' said Lee Jae-won of Shinhan Securities. 'If oil and other commodity prices continue to climb, that could fuel inflationary pressure and dampen expectations for rate cuts.'
Korea Herald
11-06-2025
- Automotive
- Korea Herald
Kospi soars to over 3-yr high on foreign buying spree, eased tariff uncertainties
South Korea's stock market surpassed the 2,900-point mark for the first time in over three years Wednesday, extending its winning streak to a sixth day, thanks to continued foreign inflow and progress in trade talks between the world's two biggest economies. The benchmark Korea Composite Stock Price Index added 35.19 points, or 1.23 percent, to close at 2,907.04, marking the highest level since January 14, 2022, when the index closed at 2,921.92. Trade volume was heavy at 383.5 million shares worth 12.3 trillion won ($9 billion), with winners outnumbering losers 600 to 281. Foreign investors continued their purchases of local shares for a sixth consecutive session. "The Kospi breached the 2,900-point mark on upbeat momentum created by favorable US-China trade negotiations and foreign investors' continued purchase of big-cap shares," Lee Jae-won, an analyst at Shinhan Securities, said. High-level officials from Washington and Beijing held trade talks in London for two days through Tuesday, where they agreed on a framework to carry out measures to resolve their trade disputes on rare earths and technology. Kim Jae-seung, an analyst at Hyundai Motor Securities, said expectations on the Lee Jae-myung government's policy to boost the local stock market also improved market sentiment. Lee, who took office last week, has pledged to usher in the 5,000-point era and get rid of the so-called Korea discount, which refers to investors' tendency undervalue South Korean assets due to geopolitical risks or other issues. Overnight, Wall Street also closed higher, with the Dow Jones Industrial Average rising 0.25 percent, the S&P 500 adding 0.55 percent, and the tech-heavy Nasdaq composite gaining 0.63 percent. In Seoul, tech behemoth Samsung Electronics increased 1.18 percent to 59,900 won, and its chipmaking rival SK hynix jumped 4.12 percent to 240,000 won. Top automaker Hyundai Motor climbed 2.03 percent to 201,000 won, while its sister Kia advanced 2.54 percent to 96,900 won. Hyundai Motor's auto-parts making affiliate, Hyundai Mobis, soared 4.91 percent to 288,500 won. Major nuclear power plant manufacturer Doosan Enerbility also surged 6.46 percent to 51,100 won, and Kakao, the operator of the country's dominant mobile messenger, went up 2.8 percent to 51,400 won. On the other hand, some of the big-cap defense and shipbuilding shares lost ground as investors sought to gain profit following their rally the previous day. Defense giant Hanwha Aerospace lost 3.31 percent to 905,000 won, and leading shipbuilder HD Hyundai Heavy dropped 2.11 percent to 418,000 won. Major financial firms also went down, with KB Financial dipping 3.34 percent to 107,200 won and Shinhan Financial losing 1.81 percent to 59,800 won. The local currency was trading at 1,375.0 won against the greenback at 3:30 p.m., down 10.7 won from the previous session. (Yonhap)
New Straits Times
04-06-2025
- Business
- New Straits Times
South Korean shares rally on post-election stimulus, reform hopes
SEOUL: South Korean shares climbed on Wednesday to their highest levels in 10 months, as liberal presidential candidate Lee Jae-myung's election victory raised hopes of swift economic stimulus policies and market reforms. The benchmark KOSPI jumped 2.66 per cent to 2,770.84, posting its biggest daily gain in nearly two months and closing at the highest level since August 1, 2024. Lee officially took office as president on Wednesday, just hours after his victory in a snap election the previous day. His swift rise to power ends six months of political turmoil sparked by former President Yoon Suk Yeol's failed attempt to impose martial law in December - a move that stunned the country and rattled financial markets. "The inauguration of the new administration resolved political uncertainty," said Kang Jin-hyeok, an analyst at Shinhan Securities. "And, there are expectations that policy drives could be strong as Lee's Democratic Party holds a majority in parliament," Kang said. Foreign investors snapped up local shares worth 1.05 trillion won (US$766.60 million), marking their biggest single-day purchase since August 16, 2024. Lee has pledged to bring corporate reform measures to boost the domestic stock market, raise investment in artificial intelligence, and revive an economy reeling from slowing growth with stimulus policies. On capital markets, Lee has pledged to revive legislation within a few weeks to curb abuses by controlling shareholders of chaebol conglomerates, as part of his "KOSPI 5,000" pledge to double the value of the domestic stock market. The revision to the Commercial Act is seen by market analysts as a fundamental change needed to resolve the so-called "Korea Discount", a tendency for local shares to be undervalued compared with global peers due to low dividend payouts and opaque corporate governance. The securities sector was the top gainer, rising 8.1 per cent to its highest level since August 2009, while financial groups jumped 6.5 per cent to the highest point since May 2008. Analysts anticipate that these sectors will be among the biggest beneficiaries of ongoing market reform efforts. "We expect to see meaningful progress in capital market and governance reform post-election," Morgan Stanley's analysts said in a note, setting their KOSPI target for June 2026 at 2,800 for the base case and 3,100 for the bullish case. Renewable energy stocks rallied on expectations of a reversal in energy policy away from nuclear energy, with Hanwha Solutions climbing 5.7 per cent and OCI gaining 4.9 per cent, while the construction sector rose nearly 3 per cent on stimulus hopes. With President Lee signaling a more conciliatory approach toward North Korea and China, stocks linked to North Korea, such as In The F and Namkwang Engineering & Construction , as well as China-exposed sectors like beauty and entertainment, saw gains. Among major heavyweights, chipmaker SK Hynix gained 4.8 per cent, while rival Samsung Electronics rose 1.8 per cent, further buoyed by overnight gains among US peers. "A combination of aggressive industrial policies and expansionary fiscal policies could lead to faster economic growth, at least in the short term," said Kim Jin-wook, an economist at Citi. Lee announced plans to draft a second supplementary government budget of at least 30 trillion won to support the trade-reliant economy, which has been hit by US tariffs and is projected to grow by just 0.8 per cent this year. This follows a 13.8 trillion won supplementary budget passed in May. The won strengthened 0.55 per cent to 1,369.5 per dollar on the onshore settlement platform. The country's treasury bond yields rose, with the benchmark 10-year yield gaining 9.3 basis points to 2.894 per cent, the biggest jump since January 13.
Korea Herald
04-06-2025
- Business
- Korea Herald
Kospi reclaims 2,700 intraday amid preelection momentum
South Korean stocks held firm Monday as anticipation of Tuesday's presidential election helped extend recent gains, with the benchmark Kospi reclaiming the 2,700 level during intraday trading on the final session before a new administration takes office. The Kospi opened strong at 2,709.92, nearly 10 points above Friday's close, and climbed to an early high of 2,719.87 within the first 20 minutes. The index remained above 2,700 through the morning before paring gains to end slightly higher at 2,698.97. While slightly weaker than last week's momentum, Monday's performance marked a continuation of the recent rally. The Kospi had broken above 2,700 last Wednesday for the first time in nine months, after months of trading between 2,400 and the mid-2,600s and stalling near 2,600 in May. Institutional investors weighed on the market, emerging as net sellers of roughly 241.5 billion won ($175.8 million). Foreign investors flipped the Kospi into positive territory late in the session, ramping up purchases to end as the day's biggest buyers with a net 125.1 billion won. Retail investors also helped support the index, adding 99 billion won in net purchases. The secondary Kosdaq showed a contrasting trend, climbing around 0.8 percent to close at 740.29. Unlike the Kospi, retail investors turned net sellers, offloading roughly 120 billion won, while foreign and institutional investors stepped in as net buyers, purchasing 111.7 billion won and 14.3 billion won, respectively. 'With the Kospi awaiting the outcome of Tuesday's presidential election, the market is heading into the holiday without a clear directional catalyst,' said Lee Jae-won, analyst at Shinhan Securities. Sector performance was mixed, with no clear trend across industries. Chipmakers such as Samsung Electronics and SK hynix posted modest gains, while Hyundai Heavy Industries and Hanwha Aerospace also stood out among heavyweight advancers. In contrast, financial stocks, which had rallied last week, surrendered part of their recent gains. Meanwhile, the Korean won weakened about 0.7 percent to trade near 1,374 won per US dollar as of 4 p.m. Monday. jwc@
