Is Korea's stock market rebounding?

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By Lee Kyung-min

• Published Feb 16, 2025 3:36 PM KST
• Updated Feb 16, 2025 9:30 PM KST

The stock market is showing signs of rebounding, aided by months of low valuation in the second half of last year, market watchers said Sunday.

Further fueling the optimism are the country’s overall robust fundamentals, as evidenced by a limited crash in the benchmark KOSPI and secondary tech-heavy Kosdaq upon reports of U.S. President Donald Trump’s tariff threats and China’s artificial intelligence (AI) program DeepSeek in the past month.

Many say the local equity market is expected to surge, underpinned by heavy inflow of offshore investor funds that will counter the months of dwindling foreign holdings in stocks.

According to the Korea Exchange, the trading volume for the first 10 days of this month averaged 12.1 trillion won ($8.39 billion).

This is up 25.8 percent from end-January and 38.5 percent from end-December.

The daily trading volume came to 17.1 trillion won, Feb, 13, the highest since 18.7 trillion won during the Aug. 5 market rout last year.

The figure for the Kosdaq market surpassed 9 trillion won this month, up 30 percent from 6.9 trillion won last month.

Propelling the recent recovery in trading volume is the popularity of AI chip shares.

Leading IT firms including Naver, Kakao and Krafton have surged about 10 percent over the past month.

Shipbuilding and defense shares rallied on the back of strong earnings and robust profit from expanded U.S. partnerships.

The trading volume was most pronounced in Samsung Electronics and SK hynix shares, followed by Hanwha affiliates and Doosan Enerbility as well as Naver and Kakao.

This in turn pushed up the KOSPI’s daily turnover rate to 0.58 percent this month, up from 0.47 percent last month.

The figure for the Kosdaq came to 2.41 percent this month, up from 1.92 percent last month.

The rate is a measure of trading volume relative to market cap. The higher the figure, the more frequent the changes in share ownership among investors.

Meanwhile, foreign holdings in the KOSPI shares came to 676 trillion won, Feb.13, about 31.9 percent of the total.

This was the first for the figure to dip below 31 percent since September, when it stood at 31.97 percent.

It is a sharp downtrend from the previous peak of 36 percent shortly before last year's August market rout. The figure slid to 34 percent in August, before sinking further to 32 percent in November.

Foreign investors net sold a total of 17.47 trillion won of KOSPI shares this year from Jan. 1 to Feb. 14.

The equity market will show a strong performance in the months to come, led by low-valuation factors, coupled with shipbuilding, defense and software sector booms, according to Shinhan Securities.

“The long-undervalued market will identify a rebound momentum,” the report said.

“No major market tumbles ensued despite Trump’s tariff policy announcements. The KOSPI and Kosdaq will see a greater inflow of investment funds in the months to come.”