SEOUL – South Korea's benchmark stock index, the KOSPI, achieved a historic milestone on Wednesday, October 15, surpassing the 3,650 mark to set an all-time closing record. This rally propelled the total market capitalization of the main bourse over the crucial 3,000 trillion won (approximately $2.11 trillion) threshold for the first time in its history.

The KOSPI closed at 3,657.28, up 2.68% from the previous session, a stunning performance that broke its earlier record set just three trading days prior. The total market cap of the main KOSPI board was recorded at KRW 3,011.9 trillion, easily topping the prior high of KRW 2,974.6 trillion set on October 10. While the combined market capitalization of Korea's entire stock market (KOSPI, KOSDAQ, and KONEX) first breached KRW 3,000 trillion back in July, this marks the first time the KOSPI alone has achieved the feat.

Foreign Inflows Fuel Semiconductor Rally 

The unprecedented surge is largely attributed to an aggressive buying spree by foreign investors, who have been piling into the market since September. Foreigners net-purchased KRW 7.437 trillion worth of shares in the KOSPI market last month and have bought an additional KRW 4.93 trillion this month, with a net purchase of KRW 162.9 billion on Wednesday alone.

This foreign investment has been heavily concentrated in the semiconductor sector, driven by expectations of a prolonged upturn in the chip industry due to soaring demand. Market heavyweights Samsung Electronics and SK Hynix spearheaded the rally, with Samsung Electronics rising 3.71% and SK Hynix gaining 2.67%. The combined market value of the two chip giants is now nearing KRW 870 trillion, accounting for over 30% of the KOSPI's total capitalization. Even minor profit-taking prompted by renewed trade tensions between the US and China in early October failed to dampen the buying sentiment, as investors used the dips as an opportunity to accumulate more shares.

Fed Signals and Policy Hopes Provide Broader Support 

The rally received an additional boost from dovish signals from the U.S. Federal Reserve. Fed Chair Jerome Powell's recent remarks, suggesting that the conclusion of Quantitative Tightening (QT) may be "coming into view" within the next few months, were interpreted as a strong signal for continued market liquidity. This has sparked optimism about the future of monetary policy.

Furthermore, a late-day rally in traditionally overlooked sectors helped the KOSPI clinch the new record. Expectations for the promotion of "productive finance" following the government's announcement of its third real estate measure saw strong gains in securities and financial stocks, which had been previously sidelined by the tech-focused surge.

Analysts noted that institutional and foreign investors drove the sharp rebound, with the market broadly rallying despite earlier volatility. Wednesday saw a significant breadth of strength, with 759 advancing stocks overwhelming just 127 decliners among the KOSPI-listed companies. The consensus is that investor sentiment remains robust, suggesting that any temporary pullback in leading stocks is likely to be viewed as a buying opportunity, signaling continued momentum for the KOSPI's upward trajectory.

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