South Korean financial markets witnessed a historic rally on Monday, with the benchmark KOSPI index climbing more than 2% to set a new all-time high. The surge was primarily fueled by heavyweight chipmaking stocks, which mirrored gains from their U.S. counterparts.
Chipmakers Lead Record-Breaking Rally
The benchmark KOSPI jumped 91.90 points, or 2.13%, to close at 4,401.53, marking its highest level on record. The driving force behind this rally was the stellar performance of the semiconductor sector. Samsung Electronics soared 5.21% to an unprecedented peak, while its rival SK Hynix advanced 1.48%, also reaching a record high. This upward momentum followed a robust 4% surge in the Philadelphia Semiconductor Index on Friday.
Other major index contributors also posted gains. Battery giant LG Energy Solution saw its shares rise by 2.35%. Automakers joined the uptrend, with Hyundai Motor increasing by 2.35% and Kia Corp climbing 1.41%.
China-Exposed Stocks Dip Amid Summit
Not all sectors participated in the rally. Shares of companies with significant exposure to the Chinese market faced selling pressure. This decline affected K-Pop agencies, film producers, beauty product makers, game developers, and travel agencies. The downturn occurred as South Korean President Lee Jae Myung began a state visit to China, with a meeting scheduled with Chinese President Xi Jinping on Monday.
The bearish sentiment in these sectors was linked to comments from South Korea's presidential chief of staff, who indicated that it might take considerable time for Beijing to lift its unofficial restrictions on Korean cultural content. This news tempered investor optimism for an immediate resolution.
Foreign Inflows and Currency Movement
Foreign institutional investors emerged as net buyers, purchasing shares worth a substantial 651.4 billion won. This significant inflow provided strong support to the market's upward trajectory.
In the currency market, the Korean won exhibited weakness against the U.S. dollar. The won was quoted at 1,446.6 per dollar on the onshore settlement platform, representing a 0.13% decline from its previous close of 1,444.7.
In the bond market, yields moved higher. The yield on the most liquid three-year Korean treasury bond increased by 1.6 basis points to 2.948%. Meanwhile, the benchmark 10-year yield rose by 2.9 basis points to 3.413%.
South Korea's finance ministry stated that authorities would maintain close vigilance over financial markets. However, it assessed that the impact of recent geopolitical events, including U.S. strikes on Venezuela and missile launches by North Korea, on the domestic market was likely to be limited.
