KOSPI breaches 3,000 points for 1st time in over 3 years

Traders are seen at Hana Bank’s dealing room in Seoul, Friday, as the KOSPI closed at 3,021.84, up 1.48 percent from the previous session. Yonhap

The benchmark KOSPI closed above 3,000 points for the first time in over three and a half years, buoyed by improved investor sentiment following the start of the Lee Jae Myung administration, market analysts said Friday.

According to the Korea Exchange, the index ended the day at 3,021.84, up 1.48 percent from the previous session. It marked the first close above the 3,000 level since Dec. 28, 2021. The market capitalization also reached an all-time high of 2,472 trillion won ($1.8 trillion).

The secondary Kosdaq also performed strongly, closing at 791.53, up 1.15 percent.

Despite the absence of major global catalysts due to the U.S. market holiday Thursday (local time), both foreign and institutional investors remained net buyers. Foreign investors purchased approximately 567.2 billion won worth of shares, while institutions net bought 41.9 billion won. In contrast, retail investors offloaded around 597 billion won, continuing their net selling trend.

Large-cap stocks such as Samsung Electronics and SK hynix led the rally, while funds rotated into sectors including IT and software, secondary batteries and cosmetics. Kakao stood out with a sharp gain of 10.26 percent, making it one of the top performers of the day.

Previously strong sectors, such as nuclear energy, holding companies, shipbuilding and defense, saw a temporary slowdown.

After hitting a low of 2,284.72 on April 9, the KOSPI showed a sharp upward trend following Lee's election victory in the June 3 presidential election.

Foreign investors went on a buying spree, encouraged by easing political uncertainties and optimism over policy-driven domestic growth.

The KOSPI’s 10.2 percent rise as of Thursday positions Korea as the top-performing equity market among G20 countries, according to Bloomberg.

Market sentiment was also lifted by the recently announced 30.5 trillion won supplementary budget, which focuses on boosting domestic demand and investing in future-growth industries like artificial intelligence, K-culture and biotech.

Meanwhile, analysts warned that a short-term pullback is possible.

"KOSPI trading volume, which peaked near 18 trillion won on Tuesday, has been gradually declining, signaling weakening buying momentum," said Daishin Securities analyst Lee Kyoung-min. "Given that the current rally is driven more by sentiment than fundamentals, the index may face resistance around the 3,000 level and could enter a consolidation phase."