Lee Yeon-woo is a financial journalist at The Korea Times. Her wide range of reporting includes policies, macroeconomics, stock market, companies and even crypto. She is passionate about connecting the dots in Korean finance and making it easier for foreign nationals to understand. Based on her previous experience as a national reporter, she also has a keen interest in social issues within the sector, including gender equality and ESG. Your tips and insights are always appreciated. You can send them to yanu@koreatimes.co.kr.
KOSPI hits all-time high amid tax reform hopes
A screen at Hana Bank's headquarters in Seoul shows the benchmark KOSPI reaching 3,319.14 during Wednesday's intraday trading. The index closed at an all-time high of 3,314.53, surpassing levels last seen in July 2021 during a period of pandemic-driven liquidity. Yonhap
By Lee Yeon-woo
The benchmark KOSPI closed at an all-time high of 3,314.53 Wednesday, surpassing the previous record of 3,305.21 set on July 6, 2021, during a period of COVID-19 pandemic-driven liquidity.
Analysts attributed the rally to expectations of relaxed capital gains tax rules for major shareholders — a policy previously regarded as unfriendly to the stock market.
According to the Korea Exchange, KOSPI closed at 3,314.53, up 1.67 percent from the previous trading day. The index also briefly reached 3,319.14 during the session, surpassing the previous intraday peak set in June 2021.
Foreign investors and institutions bought roughly 1.37 trillion won ($987.6 million) and 902.9 billion won worth of stocks, respectively, while individual investors offloaded around 2.25 trillion won.
The secondary Kosdaq also hit a new yearly high, closing at 833, up 0.99 percent from the previous session.
The rally follows signals from the presidential office that it may retain the current 50 billion won capital gains tax threshold for major shareholders, rather than lowering it to the proposed 10 billion won. The plan, announced on July 31, was widely seen as restrictive and dragged down the market amid investor criticism.
Adding to the optimism, U.S. employment data released the previous day met market expectations, supporting the outlook for Federal Reserve rate cuts and easing fears of a recession. A 28 percent after-hours surge in Oracle shares following its earnings report further lifted sentiment in the Korean market.
"What's driving the market now is a combination of robust U.S. job figures and rising expectations for domestic policy changes," Daishin Securities analyst Lee Kyoung-min said. "While it's not new developments, it's the strengthening of existing upward forces."
Financial stocks, which had led the market ahead of the tax reform announcement, enjoyed renewed momentum. KB Financial Group climbed 7.01 percent, while Hana Financial Group rose 4.56 percent. Holding companies also gained ground, with SK Square jumping 7.59 percent and Hanwha up 2.8 percent.
Semiconductor stocks continued their upward trend amid positive forecasts for supply shortages in dynamic random access memory and NAND flash memory chips next year. SK hynix and Samsung Electronics gained 5.56 percent and 1.54 percent, respectively.
"While the final decision (on tax reform) is expected to be announced during the presidential press conference on Thursday, the market appears to have already priced in the anticipation," said Han Ji-young, a researcher at Kiwoom Securities.
"A compromised tax reform plan which could be unveiled at the Thursday press conference (by the president) could provide further upside for the market."