The South Korean stock market surged on August 5, buoyed by a record-setting performance in the U.S. markets and strong gains in major semiconductor stocks. The KOSPI index closed up more than 3%, while the KOSDAQ approached the 800 mark, continuing its upward trend for four consecutive days.
According to the Korea Exchange, the KOSPI finished at 6,598.26, up 239.30 points (3.76%) from the previous trading day. A program trading halt was triggered at around 9:24 a.m. due to a surge in buy orders, marking the first such occurrence since July 31. The index fluctuated around the 6,600 level before closing in the 6,590 range.
Foreign investors led the market's rise, net buying 1.4464 trillion won in the main stock market. In contrast, individual and institutional investors sold off 1.1853 trillion won and 280.2 billion won, respectively.
The rally was fueled by strong performances in the U.S. markets the previous night. On August 4, the Dow Jones Industrial Average and the S&P 500 both rose by 1.71% and 1.79%, respectively, reaching all-time highs. The Nasdaq also climbed 2.59%. A drop in international oil prices due to progress in negotiations between the U.S. and Iran, combined with strong earnings from AI data company Palantir, boosted investor sentiment.
The strength of U.S. semiconductor stocks translated into gains for domestic semiconductor shares. Samsung Electronics and SK Hynix rose by 2.50% and 5.77%, respectively, contributing to the index's increase. Lee Kyung-min, a researcher at Daishin Securities, noted, "The KOSPI, which has a high weighting in semiconductors, showed a stronger upward trend than the KOSDAQ, prompting the buy-side halt. The foreign net buying led to a broadening of buying interest across sectors, particularly in AI infrastructure-related industries."
The KOSDAQ market has continued its upward trajectory for four days since the implementation of stricter regulations on single-stock leveraged ETFs on July 31. On this day, the KOSDAQ closed at 799.59, up 18.87 points (2.42%) from the previous day, briefly surpassing 800 at one point during trading.
Market analysts suggest that the recovery of the KOSDAQ may continue in light of the new ETF regulations, which have previously sidelined the index. Lee Jae-won, a researcher at Yuanta Securities, stated, "As the funding efficiency and accessibility of large semiconductor leveraged products decrease, we can expect a normalization of the KOSDAQ, which has experienced excessive declines."
* This article has been translated by AI.
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