South Korean Stocks Hit Record High Amid Government's Capital Gains Tax Decision

Strategic Insights -

South Korean stocks celebrated a 10th consecutive winning session as investors responded positively to the government's decision to scrap a planned capital gains tax hike, setting a fresh record high for the Korea Composite Stock Price Index (KOSPI). The move allowed stock holdings to remain above the threshold of 5 billion won, reversing an earlier plan to lower it to 1 billion won. Market sentiment remained buoyant ahead of the Federal Reserve's rate-setting meeting, where interest rates are expected to be cut. Key players like Samsung Electronics and SK hynix traded mixed, while Hyundai Motor and Kia dipped due to decreased investor interest in the automotive sector.

Key Takeaways:

  • The government's decision to scrap the capital gains tax hike resulted in a 10th consecutive winning session for South Korean stocks, with the KOSPI reaching a fresh record high of 3,407.31.
  • Investor sentiment was boosted by the news, with a net 266.89 billion won worth of shares purchased by foreigners and retail investors.
  • Top-cap shares traded mixed, with Samsung Electronics and SK hynix surging 1.46 percent and 0.76 percent, respectively, while Hyundai Motor and Kia faced losses of 3.8 percent and 3.97 percent, respectively.
  • The decision to keep the capital gains tax threshold at 5 billion won allowed stock holdings to remain stable, supporting market sentiment.

Statistics:

  • The KOSPI rose 11.77 points, or 0.35 percent, to close at 3,407.31, surpassing the previous all-time high of 3,395.54 set on Friday.
  • Trade volume was moderate at 374.97 million shares worth 12.53 trillion won (US$9.02 billion), with winners outnumbering losers 482 to 397.
  • Foreigners bought a net 266.89 billion won worth of shares, while retail and institutional investors sold 136.82 billion won and 138.24 billion won, respectively, for profit taking.
  • The yield on three-year Treasurys went up 1.2 basis points to 2.443 percent, while the return on the benchmark five-year government bonds added 2.0 basis point to 2.584 percent.

Sources:

  • Yonhap News Agency (15 Sep 2025)