[KOSPI 2600 Era] Domestic Stock Market Strengthened by Receiving 'Vaccine' and Embracing 'Dollar'

Foreign Investors' 13 Consecutive Trading Days of 'Buying'... Net Purchases Worth 6.4 Trillion Won This Month Alone

On the 24th, when the KOSPI index hit an intraday all-time high, dealers were working at the Hana Bank dealing room in Euljiro, Seoul. On that day, the KOSPI opened at 2,616.28, up 13.69 points (0.53%) from the previous trading day, showing a strong upward trend. Photo by Moon Honam munonam@

[Asia Economy Reporter Kum Boryeong] The era of 'KOSPI 2600' has begun. The Korean stock market is being driven by the inflow of foreign investment due to the weak dollar, expectations for the development of a COVID-19 vaccine, and abundant liquidity.

According to the Korea Exchange on the 24th, the KOSPI closed at 2602.59 the previous day, marking an all-time high closing price for the first time in 2 years and 10 months since January 29, 2018. Compared to the 1457.64 recorded on March 19 during the COVID-19 pandemic, it has risen by 78.55% in just 8 months. On the same day, the market capitalization also reached a record high of 1,787 trillion won. The KOSPI continued its strong performance that day, soaring well above the 2610 mark. At 9:58 a.m., it surged to 2627.58.

The decline in the won-dollar exchange rate played a decisive role in breaking through the KOSPI 2600 level. The won-dollar exchange rate closed at 1103 won on the 18th, the lowest in 29 months. This was influenced by the election of Joe Biden, who proposed a large-scale economic stimulus package in the U.S. presidential election. Foreign investors have been on a buying spree for 13 consecutive trading days, net purchasing 6.4 trillion won worth of stocks this month alone.

News about COVID-19 vaccines has also acted as a positive factor. U.S. pharmaceutical companies Pfizer and Moderna announced that their vaccines under development showed preventive efficacy of 95% and 94.5%, respectively, and AstraZeneca reported an average prevention rate of 70%, with a maximum of 90%. Visibility for economic recovery and corporate earnings improvement next year has also increased. Junho Byun, head of the research center at Eugene Investment & Securities, analyzed, "Expectations for economic normalization next year have been pre-reflected due to vaccine development and Biden's victory in the U.S. presidential election."

Investment funds, which lost their place due to real estate pressure policies and low interest rates, have also poured into the stock market, supporting it. According to the Korea Financial Investment Association, as of the 18th, investor deposits exceeded 65 trillion won, breaking the all-time record. Hyungryul Kim, head of the research center at Kyobo Securities, explained, "In a zero-interest-rate environment, idle funds in the market flowed into the stock market, and even though they have reached a position to realize profits, they maintain mid- to long-term positions as they cannot find other investment alternatives."

The KOSPI's year-to-date increase ranked second among the Group of Twenty (G20) countries as of the 20th. The KOSPI, which was 2197.67 on December 30 last year, rose 16.19% to 2553.5 on the 20th. The first place was Argentina (23.6%).

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