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South Korean Stocks Reach New All-Time High Amid Trade Tensions and Rate Cut Hopes

Strategic Insights

— 1 min read

As tensions escalated between the United States and China, South Korean stocks reached a fresh all-time high on Wednesday, driven by hopes for an additional rate cut by the Federal Reserve and escalating trade tensions. Despite the latest trade spat, investors brushed off the news, viewing it as a "strategic move" to gain an upper hand ahead of the Asia-Pacific Economic Cooperation (APEC) summit. Analysts attributed the market's positive performance to Federal Reserve Chair Jerome Powell's remarks, which suggested the central bank is nearing its goal of "ample" reserves available for banks.

Key Takeaways:

  • The Korea Composite Stock Price Index (KOSPI) jumped 95.47 points, or 2.68 percent, to close at 3,657.28, marking the first time to climb past the 3,600 mark.
  • The benchmark index was driven by investors' hopes for an additional rate cut by the Federal Reserve and escalating trade tensions.
  • Institutional and foreign investors were net buyers, each purchasing 751.8 billion won and 162.7 billion won, respectively.
  • Retail investors sold off a net 970.5 billion won.
  • Investors seemed to be skeptical of the latest trade spat between the U.S. and China, viewing it as a "strategic move" to gain an upper hand ahead of the APEC summit.
  • Samsung Electronics advanced 3.71 percent to 95,000 won, while SK hynix inched up 2.67 percent to 422,500 won, and Samsung Biologics jumped 9.74 percent to 127,000 won.
  • Defense shares also gained ground on President Donald Trump's warning the U.S. "will disarm" Hamas if they do not disarm themselves.
  • The Korean won was quoted at 1,421.3 won against the U.S. dollar, up 9.7 won from the previous session's close.

Statistics:

  • The Korea Composite Stock Price Index (KOSPI) rose 95.47 points, or 2.68 percent, to close at 3,657.28.
  • Trade volume was moderate, at 538.8 million shares worth 13.7 trillion won (US$9.6 billion).
  • Gainers outnumbered decliners 759 to 127.
  • Institutional investors bought a net 751.8 billion won worth of stocks.
  • Foreign investors bought a net 162.7 billion won worth of stocks.
  • Retail investors sold a net 970.5 billion won worth of stocks.
  • Bond prices closed higher, with the yield on three-year Treasurys falling 1.3 basis points to 2.52 percent.

Sources:

  • Yonhap News Agency
  • Daishin Securities
  • Federal Reserve

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