KOSPI rises over 2,800 points in 2 years and 5 months

The Korea Composite Stock Price Index, KOSPI, exceeded 2,800 points for the first time in two years and five months, thanks to the upward trend of the U.S. stock markets and the positive export results of semiconductors. Some members of the financial sector have a rosy outlook that the KOSPI can rise over 3,100 points if the U.S. lowers its benchmark rate in the second half of this year, while others voice concerns against such an optimistic outlook.

According to the Korea Exchange, the KOSPI closed at 2,807.63 points on Thursday, up 10.30 points from the previous day. This is the first time the closing index has exceeded 2,800 points since January 21, 2022. Foreign and institutional investors net-purchased 478.3 billion won, and 166.9 billion won, respectively, driving up the index on Thursday. Meanwhile, the Korea Securities Dealers Automated Quotation, KOSDAQ, decreased by 3.66 points, closing at 857.51 points.

As artificial intelligence is driving up demand for semiconductors, with Nvidia leading the trend, and expectations are created for positive exports, large semiconductor shares showed significant increases. Samsung Electronics’ stock price rose by 0.49 percent from the previous day to 801,600 won, and SK hynix’s stock price increased by 1.71 percent to 237,500 won.

As there is a growing expectation in the market for the U.S. Federal Reserve’s interest rate cut in September, the KOSPI is expected to continue its upward momentum in the second half of the year. Hana Securities predicted that the KOSPI could reach 3,100 points in case of the Fed’s rate cut pivot. Researcher Yang Ill-woo of Samsung Securities also predicted in a recent report that the downward adjustment pressure for profits, which has been present for several years, wouldn’t be large this year and that the KOSPI will range between 2,650 points to 3,150 points in the second half of the year.

Meanwhile, some caution against an overly optimistic view. “I won’t be able to say ‘yes’ to a question asking if the current stock market is appropriate from a common sense perspective,” said Kang Hyun-gi, a researcher at DB Financial Investment. “Risk management will be needed starting at a certain point in the year's second half.”


소설희 기자 facthee@donga.com