KOSPI tops 3,600 for 1st time as chip stocks lead post-holiday rally

A screen at Hana Bank's headquarters in Seoul shows the benchmark KOSPI closing at 3,610.60 on Friday, up 1.73 percent from Oct. 2, the last trading day before the Chuseok holiday. Yonhap

Korea's benchmark KOSPI surged past the 3,600 mark for the first time on Friday, setting a fresh high as investors piled onto semiconductor shares after a weeklong Chuseok holiday.

According to the Korea Exchange, KOSPI closed at 3,610.60, up 1.73 percent from Oct. 2, the last trading day before the break. The index touched an intraday high of 3,617.86 before trimming gains.

Foreign investors purchased roughly 1.06 trillion won's ($746 million) worth of stocks, while institutions and individual investors offloaded around 597 billion won and 500 billion won, respectively.

Secondary bourse Kosdaq rose 0.61 percent to close at 859.49, rebounding from a recent pullback after hitting a record 877.56 on Sept. 23.

Semiconductor stocks led the gains, tracking overnight strength in Nvidia, which hit a new intraday high in New York after the U.S. cleared its chip exports to the United Arab Emirates. Samsung Electronics advanced 6.07 percent to close at 94,400 won, while SK hynix jumped 8.22 percent to close at 428,000 won.

Investor sentiment was also buoyed by a post from Elon Musk, who wrote on social media that "a billion AI chips, a terawatt of power and 100M robots" would be the keys to winning the global tech race.

Doosan Enerbility rallied 15 percent as a result, ending a sluggish September, while power equipment stocks HD Hyundai Electric and LS Electric climbed 5.6 percent and 4.1 percent, respectively.

However, steelmakers slumped as the European Union moved to tighten trade barriers, echoing recent U.S. rhetoric. POSCO Holdings and SeAH Holdings saw declines of 3.66 percent and 2.63 percent, respectively.

Defense stocks also fell as Israel and Hamas agreed on the first phase of a Gaza peace plan. Hanwha Aerospace dropped 5.01 percent, and Hyundai Rotem declined 2.65 percent.

Despite the strong chip-led rally, analysts remain cautious. They say relying solely on a single industry won't be enough to push KOSPI to the 5,000 mark, as pledged by President Lee Jae Myung.

"Only about 240 stocks are advancing, while roughly 660 are declining in the KOSPI," said Lee Kyoung-min, an analyst at Daishin Securities. "Excluding sectors benefiting from specific catalysts such as semiconductors, it's hard to describe the current market as an 'everything rally.'"

Meanwhile, the Korean won closed at 1,421 per dollar on Friday in Seoul. This marks its weakest level in approximately five months, reflecting rising global uncertainty and a lack of progress in U.S.-Korea tariff talks.

The U.S. dollar strengthened as the government shutdown entered its ninth day, while the yen weakened on expectations that Japan's expected next prime minister, Sanae Takaichi, will continue with aggressive monetary easing.

"Unlike during past crises, when the won surged alongside heightened risk, Korea's sovereign credit default swap premium remains relatively low, suggesting that the recent currency weakness is not driven by deteriorating fundamentals in the Korean economy," said Han Ji-young, an analyst at Kiwoom Securities.