[Good Morning Stock Market] KOSPI Breaks '2600', Future Outlook?..."Time to Focus on Foreign Buying Momentum"

On the 23rd, when the KOSPI index hit an all-time high, the KOSPI closing price was displayed in the Hana Bank dealing room in Euljiro, Seoul. The KOSPI closed at 2,602.59, up 49.09 points (1.92%) from the previous trading day. Photo by Moon Honam munonam@

[Asia Economy Reporter Park Ji-hwan] On the 23rd, the KOSPI surpassed the 2600 mark for the first time in history. The driving forces behind the index were the foreign investors' buying spree, betting on the won's strength and expectations of economic recovery. Domestic market experts say that the future trend of the index also depends on foreign investors' buying activity, emphasizing the need to focus on sectors that are attracting significant attention from these investors.

◆ Lee Jae-sun, Researcher at Hana Financial Investment = The key players behind the KOSPI's record high are undoubtedly foreign investors. Since November, foreigners have shown a buying preference in the order of IT, chemicals, and finance. They have fully shifted to a Buy Korea stance. At this current stage, which is the gateway to preparing for next year's earnings market, the possibility of additional mid- to long-term capital inflows from foreigners is viewed positively. Capital is flowing into emerging markets. Since November, about $12 billion has flowed into emerging market equity funds alone. The biggest factors driving emerging markets are the weak dollar and strong commodity prices. In particular, since November, the rise in metal prices has been prominent, reflecting expanded investment in eco-friendly infrastructure and expectations of China's real economy recovery.

Additionally, the mega trade agreement (FTA) deal, which was dismantled during Trump's administration, is likely to regain significance as major countries positively consider joining. Although the US-China hegemonic competition over trade leadership is expected to continue, there is greater anticipation for the formation of a new global value chain rather than the tariff wars and self-help scenarios that intensified during Trump's term. The continued net buying by foreigners centered on Korea and Taiwan, IT export countries, and India, which has a high potential growth rate, partly reflects these expectations. Since the second half of the year, domestic export momentum remains valid. As of the 20th of this month, the provisional domestic export figure increased by 11.1% year-on-year, led by semiconductors and automobiles.

◆ Seo Sang-young, Researcher at Kiwoom Securities = The Korean stock market surpassed 2600 points at the close yesterday, setting a new all-time high. This is believed to be due to foreigners' active net buying of semiconductor-related stocks. In particular, last week, when Tsinghua Unigroup, symbolizing China's semiconductor rise, defaulted by failing to repay 1.3 billion yuan of maturing corporate bonds, foreign investors concentrated their net buying on Korean semiconductor companies.

Furthermore, news that semiconductor exports increased by 21.9% year-on-year until November 20 and last week's comments from AMAT and others about a strong improvement in the semiconductor industry also fueled active net buying. Since November, foreigners have made large-scale net purchases amounting to 6.3 trillion won, with about 2.5 trillion won of active funds flowing mainly into the semiconductor and secondary battery sectors. Passive funds focused on large-cap stocks net bought 3.8 trillion won. This is estimated to be due to capital inflows into emerging markets, including Korea, which are highly export-dependent, as import demand surged in the US and Europe due to the spread of COVID-19. Meanwhile, Biden's appointment of former Fed Chair Yellen as Treasury Secretary raised expectations for aggressive stimulus measures, which is positive for the Korean stock market in the short term. However, considering that this was already anticipated, it is judged that the market should be satisfied with the removal of downside risks rather than an expansion of the upward movement. Taking this into account, the Korean stock market is expected to show changes depending on foreigners' actions in digesting supply, similar to the characteristics of the US stock market.

This content was produced with the assistance of AI translation services.