Seoul: South Korean stocks soared to a new record high on Friday, propelled by a rally in semiconductor shares and increasing expectations of a U.S. Federal Reserve rate cut next week. The Korean won also strengthened in trading against the U.S. dollar.
According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) surged by 51.34 points, or 1.54 percent, closing at 3,395.54. This surpassed the previous all-time high of 3,344.2 set just the day before and marked the third consecutive day of record highs for KOSPI. Trade volume was moderate, with 444.9 million shares traded, amounting to 13.8 trillion won (approximately US$9.9 billion), and a greater number of stocks gaining (521) compared to those declining (344).
Foreign investors were net buyers, acquiring local shares worth over 1.4 trillion won, while institutional investors purchased 611.4 billion won. In contrast, retail investors sold off 2 trillion won to take profits. Han Ji-young, an analyst at Kiwoon Securities, noted that KOSPI's rally aligns with the bullish trends in U.S. stock markets, driven by expectations of a Federal Reserve rate cut and the burgeoning artificial intelligence (AI) industry.
In the U.S., major stock indexes closed higher overnight, with the Dow Jones Industrial Average rising 1.36 percent, the Nasdaq composite increasing by 0.72 percent, and the S and P 500 adding 0.85 percent. Investor sentiment was further buoyed by the latest U.S. consumer price index (CPI), which reinforced bets on a Fed rate cut due to inflation remaining above the 2 percent target, alongside a weakening labor market.
Han also mentioned that market hopes for the Korean government to retract its controversial capital gains tax hike proposal further fueled investors' risk appetite. President Lee Jae Myung, in a press conference marking his first 100 days in office, indicated there were no immediate plans to proceed with lowering the capital gains tax threshold for stock investments, alleviating investor concerns.
In the semiconductor sector, market leader Samsung Electronics saw a 2.72 percent rise to a yearly high of 75,400 won, while rival SK hynix surged 7 percent to a record high of 328,500 won. Further gains were observed in internet and technology sectors, with Naver increasing 1.29 percent to 236,000 won and Kakao soaring 9.35 percent to 65,500 won. SK Square, involved in semiconductor and IT investments, climbed 8.35 percent to 197,300 won, and LG Energy Solution, a leading battery maker, gained 1.57 percent to 355,500 won.
Nongshim, a prominent instant noodle manufacturer, jumped 6.97 percent to an all-time high of 522,000 won, driven by export growth following the success of the global-hit animation film, K-Pop Demon Hunters. In financials, KB Financial rose 1.45 percent to 119,300 won, and Shinhan Financial increased 2.21 percent to 69,300 won.
However, major shipbuilders experienced declines after recent gains, with HD Hyundai Heavy falling 1.35 percent to 510,000 won, HD Korea Shipbuilding dropping 1.54 percent to 416,500 won, and Samsung Heavy slipping 1.57 percent to 22,000 won. Doosan Enerbility, a power plant manufacturer, also saw a 1.8 percent decrease.
The Korean won was quoted at 1,388.2 against the greenback at 3:30 p.m., up 3.6 won from the previous session. Bond prices fell, with the yield on three-year Treasurys rising by 1.1 basis points to 2.431 percent, and the five-year government bonds yield increasing by 0.7 basis points to 2.564 percent.